Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions —

Mr. Speaker: I remind hon. Members that they should not ask more than one supplementary question. If they do, I hope that Ministers will feel obliged to answer only one.

Oral Answers to Questions — TRADE

Disabled Persons (Air Travel)

Sir David Price: asked the Secretary of State for Trade, in view of the fact that 1981 is the International Year of Disabled People, if he will take steps with British airports and British airlines, respectively, to improve facilities for air travel by disabled pepole, especially those confined to wheelchairs.

The Under-Secretary of State for Trade (Mr. Reginald Eyre): The provision of facilities for disabled air travellers is a matter for the airports and airlines concerned, and a good dealhas been, and is being, done to improve the lot of the handicapped when they travel by air. Airport and airline representatives have participated in the meetings reviewing the special meeds of disabled passengers held under the auspices of my right hon. Friends the Secretary of State for Transport and the last Minister for Social Security. We encouraged the widest possible airport and airline representation at last Thursday's conference on "Transport without Handicap".

Sir David Price: Is my hon. Friend aware that we have just prayed for the tranquility of the Realm? Is he further aware that the difference between what the airlines say is available to disabled passengers and what actually happens is vast and intranquil?

Mr. Eyre: I, of course, take careful note of my hon. Friend's point. My information is that the British Airports Authority has improved the facilities available, and it is known that further improvements will be made in 1981. Similarly, the airlines' organisation has produced for its airlines a new set of standard procedures for the medical clearance and sympathetic handling of disabled passengers.

Mr. Carter-Jones: Will the Minister give a lot more support to the "Access to the Skies" campaign for the disabled to help give it real teeth? Will he make sure that the fourth terminal at Heathrow airport and the third London airport will provide for such a success from the beginning?

Mr. Eyre: I can assure the hon. Gentleman that we shall encourage the relevant authorities and the airlines to do everything they can to be helpful in these directions.

Imports-Exports

Mr. Adley: asked the Secretary of State for Trade if he is satisfied with the current levels of imports and exports; and if he will make a statement.

The Secretary of State for Trade (Mr. John Biffen): Our current trade position is strong. This reflects in no small way the fine achievements of our exporters.

Mr. Adley: Does my right hon. Friend agree that the corporate public wailing of the CBI seems to be in marked contrast to the privately expressed views of many of its members, huge numbers of whom are importers of raw materials and who find great benefit in a strong pound? Is it not strange, since the Labour Party won the 1964 election on the basis of wailing comments about an £800 million deficit, that we never hear anything from it about the position in January when our balance of payments surplus was, I think, £957 million?

Mr. Biffen: I am sure that the Labour Party will use this question as the occasion to join my hon. Friend in congratulating our exporters on their magnificent performance.
My hon. Friend referred to the strong pound. It undoubtedly has advantages for the purchase of raw materials, but it would be wise to bear in mind that it has an impact on export performance generally.

Mr. J. Enoch Powell: Is there any sound economic reason for our seeking now to increase further the surplus on our balance of trade?

Mr. Biffen: I would not have thought so.

Mr. Neubert: Can my right hon. Friend offer a prospect of action on the problem of the importation of cut-price pianos which have been brought in from East Germany and Poland at commercially unreal prices in an attempt, presumably, to earn hard currency in the West?

Mr. Biffen: I believe that the matter is now before the European Community.

Mr. John Smith: Is the Minister aware that exporters deserve congratulation, not only on their achievements, but because they are battling against the Government's economic policy and the over-valued pound? Will he say clearly whether the Government want the pound to stay at its present level, or do they agree that it is over valued?

Mr. Biffen: The whole point of having a freely floating pound is that it shall be freely floating, and not subject to the oppressive value judgments of politicians. The right hon. Gentleman may wish to know that the pound, relative to the dollar, has fallen by 9 per cent. since October 1980, and relative to the basket of currencies by 3½ per cent. during the past month.

South Africa

Mr. Canavan: asked the Secretary of State for Trade whether he will reconsider existing trade arrangements with South Africa.

The Minister for Trade (Mr. Cecil Parkinson): No, Sir. I have no reason to think that existing arrangements are inadequate.

Mr. Canavan: In view of the obstinate refusal of the South African Government to implement the United Nations plan in Namibia, will the Minister impose sanctions against South Africa? As the Nigerian President, who is visiting Britain this week, is calling for an oil embargo against South Africa, will the Government reconsider the deplorable decision to grant shares in North Sea oil licences to Unilon, which is a South African company, and to Charter Consolidated, which has South African connections?

Mr. Parkinson: The Government take the view that dialogue and contact are the most constructive bases for our relations with South Africa. They are far to be preferred to ostracism and isolation. We work on exactly the same principles in our dealings with the hon. Gentleman.

Mr. Anthony Grant: Does my hon. Friend recall that the former President of the Board of Trade, the right hon. Member for Barnsley (Mr. Mason), said that it was important that we increased our trade with South Africa,

and that if we stopped trading with people with whose policies we disagreed we would soon be bankrupt? Is not what the hon. Member for West Stirlingshire (Mr. Canavan) said yet another example of the double standards of the Labour Party in Government as opposed to in Opposition?

Mr. Parkinson: I agree with my hon. Friend. He was right to say that if we applied a political acceptability test to our trade we should have to strike a large number of countries from our trading lists, and a large number of people would be out of work.

Mr. Gordon Wilson: Does the Minister agree that if Unilon is given the right to prospect for oil in the North Sea it will be carrying the hand of friendship a little too far?

Mr. Parkinson: I suggest that the hon. Gentleman tables a question to my right hon. Friend the Secretary of State for Energy, who will explain the basis on which the licences are allocated.

Mr. Bowen Wells: I congratulate my hon. Friend on that reply. Is he aware that he could have said that it was a matter for the EEC? Does he understand that such replies are irritating and that he should say what the EEC is doing about these matters?

Mr. Parkinson: I content myself with thanking my hon. Friend for his opening remark.

Mr. Clinton Davis: Will the Minister confirm or deny the allegation made by "Anti-apartheid" that British owned and operated tankers, with the connivance of the British Government, have been playing a central role in secret international deals to breach the OPEC embargo on oil supplies to South Africa?

Mr. Parkinson: If the hon. Gentleman cares to table a question on that subject, I shall endeavour to answer it.

Collusive Tendering

Mr. Beaumont-Dark: asked the Secretary of State for Trade whether he has yet concluded consideration of whether collusive tendering should be made a criminal offence.

The Minister for Consumer Affairs (Mrs. Sally Oppenheim): I am still considering the many useful representations received. Views were sharply divided on the desirability of creating a new criminal offence, and I am weighing these arguments carefully before coming to a decision.

Mr. Beaumont-Dark: Does my right hon. Friend think that the consultations and considerations that have been taking place since July have continued long enough, and that we should make up our minds whether collusive tendering, which is an evil, is to be legislated against, or whether extra powers should be given to the Office of Fair Trading to stamp out the offence for fair-minded business people and local authorities?

Mrs. Oppenheim: I agree that major competition issues are involved in collusive tendering. As with other restrictive agreements, it is subject to registration under the restrictive trades practices legislation. As my hon. Friend knows, collusive tendering is especially deceptive and difficult to detect. It is difficult to find concrete


evidence. That is why my Department issued a Green Paper on the subject. One of the problems confirmed in the response to the Green Paper concerns the practicalities of enforcement. It has been pointed out that the existing law on fraud may suffice in clear-cut cases. The matter deserves urgent and diligent consideration.

Mr. John Fraser: Is the Minister aware that simply because something is difficult to detect it is not a reason for not making it a crime? As the Liesner committee reported on the matter two years ago, and as collusive tendering amounts to little more than a conspiracy to defraud public authorities and ratepayers, should not the practice be made a crime immediately?

Mrs. Oppenheim: If something is difficult to detect it is usually equally difficult to enforce. Laws that are impossible to enforce are not likely to have a deterrent effect on those who break them. As collusive tendering could be a fraudulent practice—and, in some cases, is so—the law on fraud may suffice. I want to examine the representations. I consider it to be an important competition issue. I shall reach my decision on the basis of all representations.

Credit Purchases

Mr. Soley: asked the Secretary of State for Trade if he will refer to the Director General of Fair Trading the practice known as red-lining by which companies refuse to provide credit for purchases to all consumers living within a particular area.

Mrs. Sally Oppenheim: Red-lining is not, to the best of my knowledge, widespread. The Director General is, however, compiling information about credit scoring generally. If the hon. Gentleman has any information on red-lining, I am sure that it would interest the Director General.

Mr. Soley: Does the Minister accept that in my constituency recently the whole of the White City estate was red-lined by one company until a local newspaper, The Shepherds Bush Gazette, took up the matter? The practice is taking place both there and in other places. Will the Minister take a tougher line on it?

Mrs. Oppenheim: I have just overheard an hon. Member asking what red-lining means. I confess that until a recent National Consumer Council report brought the problem to my attention I thought that red-lining was a local Labour Party practice ruling out certain party candidates lacking the requisite qualifications. As a result of the report, I am aware that red-lining is a valid consumer problem. I hope that all decisions about whether to provide credit are based on sound commercial judgment and that, in principle, a person's creditworthiness is determined only on his or her merits.
It has been claimed that debt collecting can be especially hazardous in areas where there is persistent violence. However, that does not rule out the consideration that the practice is unfair to the individual consumer.

Mr. Skinner: If the Government do not have any red-linings to offer, what about some silver-linings? Is the Minister aware that during the past few days people in Bolsover and other constituencies in the North—and I

suppose in the South also now—have been playing merry hell because they have not seen any silver-linings since the Government were elected 23 months ago?

Mrs. Oppenheim: I am well aware that the hon. Gentleman and his supporters would prefer that every cloud should have a red-lining.

Japan-United Kingdom Trade

Mr. Michael Morris: asked the Secretary of State for Trade what progress is being made in reducing the imbalance of trade between Japan and the United Kingdom.

Mr. Biffen: The imbalance of trade between Japan and the United Kingdom continues to widen and is a matter for serious concern. The European Community as a whole has a large and growing deficit in its trade with Japan. The Government fully support the course of action recently agreed by the Foreign Affairs Council to reduce that imbalance.

Mr. Morris: In view of the widening imbalance, may I ask my right hon. Friend whether he is aware that two bearing companies in Northampton—namely, Ransome Hoffmann Pollard and British Timken—are due, respectively, to close and to shed 300 jobs? Does he accept that there are two reasons for the closure and the loss of 300 jobs—first, the downturn in the motor industry and, secondly, and more importantly, the unfair trading practices of the Japanese? When will my right hon. Friend say that these trading practices are unacceptable and that the United Kingdom, alongside the EEC, will do something about them?

Mr. Biffen: That will be when the evidence is such as to convince the anti-dumping unit, and through that unit the agencies within the EEC that are sovereign in these matters.

Mr. Edwin Wainwright: In technology Japan appears to be passing through a phase of superiority in comparison with Western Europe, including the United Kingdom. Does the right hon. Gentleman accept that exports to Japan from this country and Japanese imports must be considered seriously by the Government? Is he aware that while the Japanese are imposing restrictive practices on the United Kingdom's imports it seems that we are prepared to open our doors to let in their goods, including their motor cars?

Mr. Biffen: We are always anxious to receive evidence from any quarter that will substantiate the hon. Gentleman's generalised comments. It ill-becomes the United Kingdom to initiate a trade restriction policy when 29 per cent. of our domestic product is represented by exports, whereas for Japan the figure is only 12 per cent.

Mr. Marlow: As we import from Japan two and a half times as many manufactures as we export to Japan, why do we not investigate those areas where Japanese imports are causing, on balance, harm to the British economy and keep them out, in the same way as the Italians do with Japanese cars?

Mr. Biffen: These matters are kept under constant review. It would be foolish for a country that, broadly speaking, has a direct concern in the promotion of open trade fortuitously to engage in trade restriction. If my hon. Friend can advance cogent and compelling arguments, we shall be happy to receive them.

Mr. Edward Lyons: Is not one of the reasons for the imbalance that Japan is well ahead in consumer electronics technology? Will the right hon. Gentleman consult his colleagues with a view to ensuring that British companies invest in advanced technology in this sector in Britain so that we do not have to import from Japan?

Mr. Biffen: It would be unwise for the United Kingdom Government to take a hostile attitude to Japanese investment in the United Kingdom. If the hon. and learned Gentleman is suggesting that, for example, the Nissan investment can be turned aside, let him say so. If he is inviting the Government to engage in a pick-and-choose operation, the consequences of such an operation would be extremely harmful.

Garage Servicing

Sir Frederick Burden: asked the Secretary of State for Trade if he will ask the Director General of Fair Trading what reaction he has had from the Motor Agents Association in relation to the approaches he has made to it following the Consumers Association's report on garage servicing.

Mrs. Sally Oppenheim: As I told my hon. Friend the Member for Northampton, North (Mr. Marlow) on 22 January I regard this as a valuable report which, I feel sure, reflects the experience and great concern of a number of motorists. I hope that the trade will take steps to strengthen its code of practice and to enforce it more effectively as the Consumers Association recommends. The Director General has for some time been discussing with the relevant trade associations proposals for strengthening the code of practice.

Sir Frederick Burden: Will my right hon. Friend take a considerable interest in this issue? Will she do her best to ensure that effective regulations are introduced by the motor manufacturers? Is she aware that there is undoubtedly grave concern among many members of the public over the way in which they are being taken for a rotten ride by some repair units in the motor industry?

Mrs. Oppenheim: I agree with my hon. Friend. I was especially disappointed that the MAA's published reaction to the CA report was not more constructive. I hope that acceptance by it of the many criticisms in the CA report will be reflected in a strengthened code of practice that is currently being negotiated and that such a code will be widely observed. If it is not, we shall have to consider what alternatives might be applicable.

Mr. Ioan Evans: As a result of the proposals in the Budget the Government have hit motorists by increasing the price of a gallon of petrol by 20p and by increasing the road fund licence. Will they now take some action to defend the motorist? Why did not the Government come forward with some definite proposals following a good report?

Mrs. Oppenheim: The question concerns garage servicing. If the hon. Gentleman wishes to table an appropriate question, I shall be pleased to answer it.

Mr. Alan Clark: Is my right hon. Friend aware that the Motor Agents Association has absolutely no concern for anything outside the narrow self-interests of its own membership and that it regards the public as a golden goose to be alternately plucked and stuffed?

Mrs. Oppenheim: My hon. Friend has expressed a characteristically robust view. I fear that it is a view that is shared by all too many members of the public as a result of their experience. That is why I have said that I hope that there will be a strengthened code of practice negotiated. I hope that it will be widely observed. I repeat, if it is not we shall have to consider what alternatives might be appropriate.

Mr. John Fraser: Is the right hon. Lady aware that we look forward to the time when she will be no longer a spectator but an intervener in these matters? Bearing in mind the enormous amount of evidence of abuse by garages when engaging in sales and servicing, is not there a case for giving statutory force to a code of conduct and eventually disqualifying those who repeatedly rook the consumer?

Mrs. Oppenheim: I am sure that the hon. Gentleman will be aware that at a time when the Director General of Fair Trading is conducting negotiations with those in the motor trade on this issue it would be premature for me to make a more definite observation than the fairly definite one that I have already made.

Mr. Fraser: May I advise the right hon. Lady that there is nothing like a mention of action on her part to make the negotiations easier and not more difficult?

Mrs. Oppenheim: Surely that is precisely what I have done.

Davy-Loewy (Bid)

Mr. Hooley: asked the Secretary of State for Trade if he will refer the bid of the American corporation Enserch for the British firm of Davy-Loewy to the Monopolies and Mergers Commission.

Mr. Biffen: I referred this proposed merger to the commission on 3 March.

Mr. Hooley: That answer is useful as far as it goes. Is the right hon. Gentleman aware that the objective of the American corporation is to gain control of certain chemical processes of Davy-Loewy involved in energy production, and that, having obtained it, it is as likely as not to shut down the steel plate making capacity of Davy-Loewy, which would be a disaster for Britain? Will he have close consultations with the Secretary of State for Industry about the implications of the takeover?

Mr. Biffen: I shall keep in touch with my right hon. Friend the Secretary of State for Industry on the takeover. I wish to say nothing that might imply that I have prejudged the studies now being undertaken by the Monopolies and Mergers Commission.

Mr. Flannery: Does the right hon. Gentleman realise that this famous Sheffield company is the only firm in Britain that makes entire steel mills for export? If a competitor took over the firm, changed the nature of it and closed it, does he understand that it would be a disaster for not only Sheffield—which is taking a keen interest in the proposed takeover—but for British industry generally? Even if the commission gives an unsatisfactory answer, will he do something to try to preserve this firm?

Mr. Biffen: I am sure that the hon. Gentleman has studied the Fair Trading Act 1973, especially section 84,


which places before the commission a series of criteria which cover the matters that the hon. Gentleman has raised. It will be better to wait until it has reported.

Mr. Crowther: Does the right hon. Gentleman realise that his replies will not give much encouragement to the management and work force at Davy-Loewy who are looking to him to protect their interests and the national interest? Does he accept that it would be a national disaster if the entire British steel industry became dependent on overseas producers for its metallurgical plant?

Mr. Biffen: It would not serve public policy in its widest sense if I gave the impression that I had made up my mind independently of whatever might be concluded by the commission.

Council of Trade Ministers

Mr. Kenneth Carlisle: asked the Secretary of State for Trade what particular benefits he hopes to achieve from the United Kingdom Presidency of the EEC Council of Trade Ministers.

Mr. Biffen: It is too early to go into details of specific objectives, but I will have the interests of British trade and commerce well in mind when pursuing the Government's general objective of contributing to the development of practical and constructive policies in the Community.

Mr. Carlisle: I thank my right hon. Friend for that reply. Will he do his best to make progress to enable our successful insurance industry to compete on equal terms on the Continent? Although trade has to be fair for our visible trade, is he aware that that is still not so for invisible trade?

Mr. Biffen: I am sure that the development of the European Community in respect of insurance, in sympathy with the objectives of the Treaty of Rome, would be widely welcomed in this country. My right hon. and learned Friend the Chancellor of the Exchequer and I will bear that in mind.

Mr. Hardy: Can we expect British trading interests to be more greatly protected than they appear to be? Last year we imported 169,870 electric dry irons from East Germany at a United Kingdom landed price of £1·70. How many jobs in British manufacturing and in the British steel industry does that sort of unfair competition sacrifice?

Mr. Biffen: That point relates to the external trade policies of the European Community. If the hon. Gentleman would like to draw the attention of the anti-dumping unit of the British Government to that phenomenon, we shall consider it.

Mr. Archie Hamilton: Will my right hon. Friend be careful to ensure that the European Community does not restrict imports too much from the under-developed world, because to take the manufactures of those countries is better than to give them aid?

Mr. Biffen: As a broad proposition, one would wish to see a liberal trading Community rather than a protectionist Community. The operation of the common agricultural policy shows us the dangers of being protectionist. However, there are a number of industries, of which textiles is one, where we want to balance many interests in the conclusion of policy.

Mr. John Smith: What is the Government's objective in the negotiations between the EEC and the United States for the protection of British textiles from unfair American competion based on cheap energy? Is he aware that he has placed a great deal of reliance on EEC action to protect the British industry? What action does he want it to take?

Mr. Biffen: We support the representations made by the European Community, through the Commission, to the United States Government with a view to securing action in respect of natural gas. However, we shall have to see how those negotiations proceed. I remind the right hon. Gentleman—and it should be well understood in the Chamber—that, at the end of the day, we are not sovereign in these matters.

Flags of Convenience

Mr. Clinton Davis: asked the Secretary of State for Trade if he proposes to raise the issue of flags of convenience at the next meeting of EEC Transport Ministers.

Mr. Eyre: Open registries were discussed at the last European Community Transport Council in November at the instance of the Federal Republic of Germany. They will now be considered further by the Council transport working group.

Mr. Davis: What action are the British Government proposing to take? Is the Minister aware that the Liberian shipowners' council is soliciting allies to resist the attack on flags of convenience? Is he prepared to form part of such a dubious alliance? Will he support the initiative taken by the Federal Republic of Germany and other countries in the EEC to prevent that attack on British and other shipping and the importation of the dubious standards which are employed by the flags of convenience?

Mr. Eyre: The need in UNCTAD is that any analysis of flags of convenience should be realistic and impartial, with an emphasis on economic realities rather than political preconception. Any abuses—if they exist—should be considered with a view to their elimination. The work of the International Maritime Consultative Organisation is valuable in this respect.

Mr. James A. Dunn: What action is the Minister intending to take to discourage British shipowners from using flags of convenience which often means lowering safety standards as well as all the other conditions of employment? Does he realise what would happen in the seafaring community in this country if he did not take action?

Mr. Eyre: We are opposed to a number of practices associated with open registries—or flags of convenience, as the hon. Gentleman calls them—and also with some of the practices applying to the traditional registries. We do not consider the existence of open registries to be an issue. What matters are the standards of safety, crewing and manning and all the matters which are connected with good standards in shipping. Those are better enforced by international conventions.

Mr. R. C. Mitchell: If more and more British ships are transferred to flags of convenience, what would happen if there were another war and we needed a Merchant Navy? We praised the Merchant Navy during the last war, but now we are completely ignoring it.

Mr. Eyre: The hon. Gentleman should be aware that from 1965 to 1979 the open registry share of the world fleet grew from 14 per cent. to 28 per cent. That process has levelled off in the last three years. More foreign-owned shipping is registered in the United Kingdom than there are United Kingdom-owned ships registered under foreign flags.

European Community (Visible Trade)

Mr. Knox: asked the Secretary of State for Trade what was the surplus on visible trade with the European Economic Community in January; and how this compares with the position in January 1980 and January 1979.

Mr. Parkinson: In January of this year, the United Kingdom had a crude surplus of £369 million on her trade with the Community, compared with crude deficits of £218 million and £20 million in January 1979 and January 1980, respectively.

Mr. Knox: Does my hon. Friend agree that those figures show a remarkable improvement in our trade with the EEC over the last two years? By what percentage has the value of exports to the EEC from Britain increased since we joined the Community in 1973?

Mr. Parkinson: Our exports to the EEC have grown at an average annual rate of 28 per cent. since we joined the EEC. The figure is 19 per cent. for exports to the rest of the world.

Mr. Jay: Is the Minister aware that the Continental EEC would have bought as much oil from the United Kingdom if we had not joined the EEC, and would continue to do so if we withdrew?

Mr. Parkinson: I could not argue with that proposition. The proportion of our imports of manufactures from the EEC which we cover by our exports has grown substantially from 80 per cent. in 1979 to 88 per cent. in 1980. It is not true that the whole improvement depends on oil.

Mr. Skinner: What steps will the Minister take to ensure that some of the coal which is currently stocked in the United Kingdom is used to a greater extent inside the Common Market, since we seem to have to spend much of our money on goods from the Common Market while it seems to be importing considerable amounts of coal from Third world countries? Apart from the agreement which the Government are undertaking as a result of the muscle which has been shown by the miners recently, what steps are being taken by the Minister's Department to ensure that more British coal is sold inside the Common Market?

Mr. Parkinson: The hon. Gentleman raises an important point. There is a strong world-wide demand for coal. A number of Ministers from inside and outside the Common Market have asked me recently about the possibilities of buying British coal. The problem is that the price of British coal is too high. One of the reasons for that is that the British coal industry supports too many unprofitable pits. However, there is no shortage of demand for coal. We have to get the price right.

Northern Ireland (Airline Security)

Mr. Biggs-Davison: asked the Secretary of State for Trade why the security arrangements for British airlines flying to and from Northern Ireland are not uniform; and whether he will make a statement.

Mr. Eyre: Our security requirements for British airlines flying between Great Britain and Northern Ireland are uniform. Procedures vary in detail according to local circumstances, but meet a common standard of security.

Mr. Biggs-Davison: Were not many of us who "Fly the Flag" to Northern Ireland aghast when, on security grounds, British Airways' crews refused to stay there overnight, unlike the crews of private operators, thus adding to the corporation's deficit? Have those "boys of the bulldog breed" thought better of it?

Mr. Eyre: My hon. Friend knows that there has been a long-standing refusal by aircrew of British Airways to stay overnight in Northern Ireland. That is a matter for the management. It is interesting that British Midland Airways also flies between Great Britain and Northern Ireland, but its aircrew stay overnight in the Province.

Mr. James A. Dunn: Does the Minister agree that security arrangements are inconsistent when a woman can take her handbag on to a plane but a small briefcase is not allowed? Is he aware that magazines and newspapers can be taken on board but in some cases small books are not allowed? Will he accept that that does not make sense, and will he comment?

Mr. Eyre: Arrangements for hand luggage have recently been improved. The hon. Gentleman will recognise that the purpose of the security arrangements is to stop dangerous material being taken on to aircraft.

European Community (Trademarks)

Mr. Nicholas Baker: asked the Secretary of State for Trade whether he supports the European Commission's proposals for harmonising legislation on trademarks and the creation of a Community trademark.

Mr. Eyre: The Government support the principle of a Community trademark and the need for corresponding alignment of national law. In the long term I am satisfied that the scheme will be helpful to United Kingdom traders who wish to expand their Community trade. The Commission's proposals do, however, raise a number of difficult problems, and they will be the subject of further negotiations.

Mr. Baker: Is my hon. Friend aware of the concern of the business community over a number of important points in the proposals? Will he ensure that before accepting the proposals he deals with the questions of inroads into common law rights and international exhaustion and the other significant matters that are troubling the business community?

Mr. Russell Kerr: And also whether we are going to stay in the Community.

Mr. Eyre: I appreciate the validity of the points raised by my hon. Friend. I believe that there will be further substantial negotiations. The points that he raises will be borne very much in mind.

Mr. Clinton Davis: What does the Minister intend to do to try to establish the trademark registry in the United Kingdom?

Mr. Eyre: The Government are firm in their desire to secure the siting of the trademark office in London, and will make specific proposals about a site at a more appropriate date, having regard to the probable length of the negotiations.

Origin Marking

Mr. Waller: asked the Secretary of State for Trade if he has any plans to extend the sector covered by the Origin Marking Order (S.I., 1981, No. 121).

Mrs. Sally Oppenheim: I shall keep the case for extension under review; but my first priority is to implement the order, the principle of which has been widely welcomed, as it stands, before considering the case for bringing in new products or sectors.

Mr. Waller: Will my right hon. Friend take into account the special situation of the clothing industry over origin marking? If it can he shown that the purchaser of an article of clothing has an economic need to know the country where the cloth was made, as well as the country where the article was made up, will she consider extending the order?

Mrs. Oppenheim: I have received a number of representions on the matter, but I fear that it is not practical to extend the order in that way. However, manufacturers, textile weavers and suppliers of cloth are free to supply the information when goods are made up and they often do so.

Mr. Woolmer: Does the Minister recognise the strong feeling, in particular in the wool textile industry, about consumers being misled by labels which, for instance, on a wool suit state "Made in Britain", when, in fact, the cloth is imported? Is it not disgraceful for her to ask the industry to prove that the consumer will benefit from more accurate labelling? Is it not merely an excuse for non-action? Will she reconsider the point about the need for the consumer to know whether he is buying the product of a British worker?

Mrs. Oppenheim: If not disgraceful, it is remarkable that such criticisms should come from Opposition Members. They are vocal about wishing to extend the order, but their Government took no such steps when in office. I understand the textile industry's case, but it is for the industry to make representations to the manufacturers, most of whom will be pleased to put the label "British made" on textiles.

Mr. John Fraser: May I congratulate the right hon. Lady on making an order following on negotiations that I started about three years ago? Will she extend origin marking of foreign goods to cutlery and silverware blanks, which are imported from South-East Asia and plated in Sheffield but which are marked "Made in Sheffield" or "Made in England"?

Mrs. Oppenheim: With due respect, the hon. Gentleman appears to be woefully ignorant of the second order to be made, which refers specifically to cutlery and cutlery blanks. The matter is covered by the amending order. Many cutlery manufactures, including Viners Ltd., already mark on blades, for instance, "Made in Korea".

Shipping (Provisional Registration)

Mr. James Johnson: asked the Secretary of State for Trade if he will set up an inquiry into the current system of provisional registration for shipping, following the abuses in the case of the "Tiger Bay", which ran aground on a voyage to Riga in the winter of 1980.

Mr. Eyre: The facility of provisional registration is under examination as part of a general review of the registration provisions of the Merchant Shipping Act 1894. It is our intention to introduce new legislation as soon as possible after the review has been completed.

Mr. Johnson: Does the Minister admit that the 1894 legislation allows registration without inspection or survey? Does not that amount to the "flag-of-convenience" process, albeit under our own flag?

Mr. Eyre: The hon. Gentleman fairly acknowledges that the legislation has applied since 1894. Under the Merchant Shipping Act there is provision for the master to take certain steps if a ship is not seaworthy. We shall bear in mind the case of the "Tiger Bay", but we do not have evidence of widespread abuse.

Mr. Skinner: Is the Minister aware that in the past three-quarters of an hour the Department of Trade has set up half a dozen quangos to watch various matters and six committees to take other matters into consideration and that a further half a dozen matters are being put under review? How many more civil servants will all that require?

Mr. Eyre: The first Merchant Shipping Act was passed in 1894. Instead of criticising us for not doing anything about it, the hon. Gentleman should accuse his right hon. and hon. Friends.

Mr. Clinton Davis: Is the Minister so ignorant that he does not recognise that there was a substantial change in the law relating to merchant shipping in 1978? Does he accept that the "Tiger Bay" incident illustrates the fact—as my hon. Friend the Member for Kingston upon Hull, West (Mr. Johnson) said—that substandard shipping can join the British register, as admitted by his noble Friend Lord Trefgarne? When will the law be changed to ensure that permanent and provisional registration will be conditional upon inspection and survey?

Mr. Eyre: The changes in 1978 that the hon. Gentleman mentions did not relate to this loophole. I have made it clear that the review will take account of the considerations mentioned by the hon. Member for Kingston upon Hull, West (Mr. Johnson).

Spectacles (Sales)

Mr. Lawrence: asked the Secretary of State for Trade if he will now take steps to prohibit restrictive practices in the sale of spectacles.

Mrs. Sally Oppenheim: I understand that the General Optical Council's revised rules on price display have been submitted to the Privy Council for approval. The Director General has decided that these should be given time to prove their effect on competition before reconsidering use of his powers.

Mr. Lawrence: Since my right hon. Friend believes passionately in competition, can she tell my why it is


necessary for us to pay £40 for a pair of spectacles when a similar product is on sale in America and elsewhere for only £5? What assurance can she give that the price of spectacle frames will not be kept artificially high and that prospective buyers will be able to go from qualified testers to whichever optician they choose, having compared prices exhibited in shop windows?

Mrs. Oppenheim: The quick answer to the first part of my hon. Friend's question is that he should buy spectacles in the United States—[HON. MEMBERS: "Oh."] I recognise that the problem of competition concerns a number of people. The Government are encouraging opticians to be more open about prices, so that patients can be made more aware of the cost involved and of comparative costs before committing themselves to purchase.

Mr. Greville Janner: Is the Minister aware that the optical profession seeks to defend the excess prices charged on spectacles by saying that it is not paid a decent rate for normal optical services? In looking into this matter, will the Minister also consider the entire question as it affects that profession?

Mrs. Oppenheim: I shall certainly bear in mind all aspects of the matter which affect the consumer and which affect questions of competition. The hon. and learned Gentleman will be aware that there are a number of aspects of this question which affect my right hon. Friend the Secretary of State for Social Services.

Mr. John Smith: Is the Minister aware that her original reply to this question is deeply unsatisfactory in that as the Minister allegedly responsible for consumer protection she advised an hon. Member to purchase goods outwith this country, where he might obtain better terms? Is she aware that time after time today, when issues of competition have arisen—on which she says that she places great reliance—it has been clear that the Government are prepared to do very little in practice to back the philosophy of competition that they allegedly espouse?

Mrs. Oppenheim: British goods will be sold successfully in this country and abroad only when their prices and quality are comparable with those of goods obtainable from abroad. While they are not, clearly consumers will not buy goods manufactured in this country. The whole point of strengthening competition policy, which the Government to a large extent have done, is to ensure that lower prices and higher standards prevail for consumers.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Bilateral Aid

Mr. Deakins: asked the Lord Privy Seal what was the United Kingdom's bilateral aid to the poorest countries in the latest 12 months for which figures are available; and how this compares in real terms with the previous 12 months.

The Minister for Overseas Development (Mr. Neil Marten): Net bilateral aid to the poorest countries in the calendar year 1980 is estimated at £288 million, which is about 24 per cent. lower in real terms compared with 1979. But I would emphasise that this does not represent a policy

decision to cut aid to these countries by 24 per cent. United Kingdom aid is planned on a financial year basis. The pattern of drawings often fluctuates sharply between quarters. Drawings in the first three-quarters of the current financial year by some recipients, notably India, were lower than anticipated. The level of bilateral aid drawings in the calendar year 1980 was low, in contrast to 1979 which was rather high, in relation to resources available.

Mr. Deakins: Is the Minister aware that a cut of this magnitude from one year to the next may have a disastrous effect on the economies of some of the poorest countries in the world? Is he further aware that such countries, particularly those hit by oil price rises and the world recession, may be driven into deeper economic straits, leading to a political instability which would be in no one's interests?

Mr. Marten: Yes, I recognise those facts. But, as I said in my answer, this is not a cut.

Mr. James Johnson: Does the Minister accept that the saddest feature of all this cutting, economy and cheeseparing is in overseas education? The Minister must know as well as I do, because he goes overseas far more than I do, that countries overseas are dying for teachers, particularly teachers of the English language. Is he aware that this hits back at us and at his party because if the English language is losing ground our business men are at a disadvantage in competing against the French and many other nations?

Mr. Marten: I recognise that, but plenty of teachers are willing to go abroad. The market is there and they go. Overseas countries can employ them if they want to, and they can go there if they want to.

Mr. Russell Johnston: As the Minister has twice said that this figure does not represent a cut, will he assure the House that in the year ahead the Government will take steps to ensure that the drop will be made up?

Mr. Marten: We shall do our best to do so, but it is not necessarily the fault of this Government. The receiving Governments are sometimes very slow in taking up what we have offered.

Commonwealth Development Corporation (Energy Resources)

Mr. Hooley: asked the Lord Privy Seal what commitments the Commonwealth Development Corporation has currently to projects in the field of energy resources.

Mr. Neil Marten: In 1979 and 1980, taken together, the CDC made commitments of about £37 million to projects in this field.

Mr. Hooley: Is the Minister aware that the Commonwealth Development Corporation has considerable expertise in energy matters and has given considerable help to overseas countries? In the light of this and the problem of oil prices, will he ensure that the resources available to the CDC are expanded and its borrowing powers increased and that there is no question of cutting back on its activities?

Mr. Marten: My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and I have


discussed exactly that point with Lord Kindersley, the chairman of the CDC. I hope to have an answer on this in the fairly near future.

Mr. Bowen-Wells: Is the Minister aware that the CDC will be unable to make any commitment, not only in energy but in any other area, unless he manages to convince the Treasury that for the CDC to borrow on the open money markets, and indeed overseas money markets, is not a real charge on the public sector borrowing requirement? What steps has he taken to convince the Treasury of that?

Mr. Marten: Discussions are still going on. I hope to make an announcement on this as soon as a decision has been reached by Ministers.

Zimbabwe

Mr. Canavan: asked the Lord Privy Seal what recent representations he has received about further aid for Zimbabwe.

Mr. Neil Marten: We are in close touch with the Zimbabwe Government about all aspects of our aid programme. As regards people in this country, I have received a number of letters urging the provision of further aid to Zimbabwe and a similar number suggesting that we have already done too much.

Mr. Canavan: In view of the urgent need for a multimillion pound development programme in Zimbabwe and the lofty promises made by Britain at the Lancaster House conference, will the Minister increase the miserable offer that the Government have made so far? If the Treasury really is bankrupt, why does he not demand that the oil companies, including BP, hand over to the Zimbabwe Government the millions of pounds in profits that they made by breaking sanctions against the illegal Smith regime?

Mr. Marten: The latter part of that supplementary question, I am sure, is beyond the scope of this question. On the former part, I simply do not agree with the basis of the question. We have given £75 million in aid, £14 million in training and education, £7 million on ATP. That is a total of £96 million. In addition, there is £22 million forgiveness of debt relief, £33 million of debt has been rescheduled and we are also giving military assistance. That is not a bad record, but it must be up to the rest of the world, as well as ourselves, to help Zimbabwe.

Mr. Paul Dean: In view of the special difficulties that Zimbabwe faces following the war, and also the great economic prospects, will my hon. Friend think again about this and recognise that it might be wise to be generous now on the principle that prompt aid at this stage will do the most good and bring the best return?

Mr. Marten: I am very sympathetic to the line taken by my hon. Friend. I think that we must await the results

of the donors' conference at which my right hon. Friend the Lord President of the Council will represent this country.

Mr. Guy Barnett: Is the Minister aware that the Zimbabwe Government reckon that it is in the next three years that the job needs to be done, and that generous aid is therefore needed during those three years in the hope that they can stand on their own feet after that? Will he also confirm that the money for Zimbabwean students in this country has not been included in the figure that he quoted for aid to Zimbabwe?

Mr. Marten: The figure of £14 million that I quoted is within the money, but we are considering further money. This will, however, have to await the outcome of the donors' conference. On the first part of the question, I agree that aid during the next three years is what is needed. I think that we have done extremely well. I repeat that one should await the outcome of the donors' conference.

Mr. Brocklebank-Fowler: asked the Lord Privy Seal if he will make a further statement on the likely level of disbursement of aid to Zimbabwe in the current financial year.

Mr. Neil Marten: It is too soon to tell precisely how much we shall spend in aid to Zimbabwe in this financial year, but we expect the total to be about £14·5 million.

Mr. Brocklebank-Fowler: Will my hon. Friend consider making special funds available in the coming year to enable Zimbabweans currently at school in Britain to continue their education at British universities later this year?

Mr. Marten: Yes. These matters are under consideration at the moment.

Mr. McNamara: Does not the Minister agree that the Western world has a great deal at stake in regard to the success of Mr. Mugabe's Government in Zimbabwe? Is not it regrettable that, at this stage, he is not able to give a more positive indication about the extra assistance that is likely to be given by the Government at the donors' conference?

Mr. Marten: It is customary to announce at the donors' conference, and not beforehand, what aid, if any, one will give.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, notwithstanding the provisions of Standing Order No. 4 (Prayers against statutory instruments, &amp;c. (negative procedure)), the Motions relating to Town and Country Planning may be proceeded with, though opposed, until half-past Eleven o'clock or for one and a half hours after the first of them has been entered upon, whichever is the later, and Mr. Speaker shall then put any Question necessary to dispose of proceedings thereon, if not previously concluded.—[Mr. Brooke.]

Orders of the Day — WAYS AND MEANS

Order read for resuming adjourned debate on Question [10 March].

Orders of the Day — AMENDMENT OF THE LAW

Motion made, and Question proposed,
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this resolution does not extend to the making of—

(a) any amendment with respect to value added tax so as to provide—

(i) for zero-rating or exempting any supply;
(ii) for refunding any amount of tax;
(iii) for varying the rate of that tax otherwise than in relation to all supplies and importations; or
(iv) for any relief other than relief applying to goods of whatever description or services of whatever description; or
(b) any amendment relating to the surcharge imposed by the National Insurance Surcharge Act 1976 and applying to some only of the persons by or in respect of whom the surcharge is payable.—[Sir Geoffrey Howe.]

Question again proposed.

Orders of the Day — Budget Resolutions and Economic Situation

[Relevant European Community documents: No. 10444/80 and the annual report on the economic situation in the Community (1980) and the economic policy guidelines for 1981.]

Mr. Speaker: Before I call the Minister, I must inform the House that I already have a long list of right hon. and hon. Members who have indicated that they hope to catch my eye. It will be impossible for them all to be called, although they have a legitimate right to be called. I appeal to hon. Members not to come to the Chair, because, as my predecessor used to say, it would be "counter-productive". That is an extremely effective sanction.

The Secretary of State for Employment (Mr. James Prior): I am indeed grateful to the Opposition for changing their speakers so that I have a chance of coming to the Dispatch Box this afternoon. For a little while I wondered why they had changed their speakers at the last moment and had decided that the right hon. Member for Chesterfield (Mr. Varley) should appear at the Dispatch Box rather than the right hon. Member for Salford, West (Mr. Orme). But having seen his performance on Thursday evening, when he was completely clobbered by my right hon. Friend, I am not in the least surprised that they do not want to risk him again this afternoon.
Therefore, this gives me a good opportunity—[Interruption.] The hon. Member for Fife, Central (Mr. Hamilton) is extremely active this afternoon. He is in very good voice. I hope that he will listen carefully to what I have to say, because it is just possible that he may learn something.

Mr. William Hamilton: Not from you.

Mr. Speaker: Order.

Mr. Prior: My right and learned Friend the Chancellor has introduced a very tough Budget at a critical and difficult time for our country. I do not know anyone who realistically expected anything other than a hard Budget this year. Despite the recession, many inflationary tendencies are still in our economy. The pressures of inflation are still present. The level of earnings is still rising considerably faster than the level of prices. There is no doubt that inflationary pressures are still around. Both the level of public spending and money supply testify to this.
Nor have I seen any informed comment that does not accept that a hard Budget was necessary. Those who ask for a give away—some Labour Members have certainly done so in their speeches—and something to boost consumer demand at a time of deep world recession, are really asking us once more to get on the old treadmill of pricing ourselves out of goods and services, in exports and in import substitution, and to make all the same mistakes that we have made in the past.
We only have to look back to 1978–79 to see what happens when one seeks to do that. In 1978–79 the PSBR was doubled. A lot more money was pushed, into the economy. The result was that we encouraged a flood of imports, and at that time we had practically no effect on the level of unemployment. Despite all that extra cash that was put into the economy, unemployment fell by 150,000 from its peak. I do not think that anyone, except perhaps a few Labour Members, really believes that that is an answer to our problems. To go down that road again would be to enact the recurrent cancer in the British economy since the war, thus steadily debilitating our capacity to compete even in the boom years. That would be fatal against a background of the worst world recession for half a century.
Even if the Government were willing to resort to the dangerous expedient of substantial devaluation to try to ease the impact that such reflation would have on our trade it could not work, because oil and energy resources have put a stop to all that.
So it was bound to be a pretty tough Budget, and tough Budgets are never popular. It was sadly inevitable, too, that a tough Budget at a time of severe recession would be particularly unpopular because everyone—industry, trade unionists, taxpayers and those dependent on State benefits—feels the pinch more at such a time and understandably looks to the Government for help.
Having said that, and recognising the disappointment, it does not mean that the vast majority of people in our country expected or wanted a reflationary Budget. They did not. They know that necessary changes in our economic and competitive position are taking place and that many hard decisions about the uncompetitive state of much of British industry, which has been building up for years, are now being made.
I would not necessarily talk about a new realism, although that is what a number of people are calling it. I would say that there are many signs that an old realism is beginning to return. Changes in working practices that have been wanted for years, and that five years ago would have been thought to be totally impossible, are now taking place on the shop floor. There has been a noticeable moderation in pay settlements. Since the early autumn the average pay settlement in private industry has been less than 10 per cent., and in many cases settlements have been much lower than that. Many workers have taken no


increase in pay at all. In addition, strikes are at a low level. That speaks volumes for the sense and stability of working people.
In many areas, our unit costs are at last beginning to move in the same direction as those of our main competitors. If we were to relax now—this is the point that I want to get across to Labour Members—and to say that enough is enough and that we have taken our medicine can relax now again, our competitors would run away from us. [Interruption.] If Labour Members do not believe this, they do not have to.
There are signs at the moment that the recession is beginning to bottom out. [Interruption.] Oh, yes. There are a number of signs from various parts of the country, from the North-West and from the West Midlands and the latest CBI statements—[Interruption.] Do Labour Members not want to see a bottoming out? Do they not accept the evidence that is presented to them? I am very surprised at the attitude they are taking this afternoon.
I turn to the measures in the Budget which are designed to help industry.

Mr. Peter Shore: The right hon. Gentleman was just about to cheer us up by giving us the evidence about bottoming out from the recession. Surely he would not want to leave that subject without giving us at least some evidence.

Mr. Prior: The right hon. Gentleman has not listened to what I have just said. I said that the evidence from the latest CBI statements and from the North-West and the West Midlands has indicated that the recession is beginning to bottom out. I should have thought that there was other evidence from the longer-term economic indicators in support of that view. Perhaps the right hon. Gentleman has not read it. I am glad to be able to tell him that this afternoon.
It is significant that nearly all the speeches that have been made by my hon. Friends in the course of the three-day debate have been devoted to the need to help industry in any way that we can. It is right that we should give our top priority to industry and to helping industry in every way.

Mr. Ron Leighton: If the recession is bottoming out, as the Secretary of State suggests, can he guarantee that when we get next year's Budget the unemployment figures will be significantly lower?

Mr. Prior: No, I cannot guarantee that. If the hon. Gentleman had a vestige of economic knowledge he would know that there are two factors involved here. First, when the economy recovers, there is bound to be an enormous increase in productivity in this country. Secondly, well after the recession has finished, when we start to climb back into greater production, the numbers of unemployed will continue to rise. I cannot, therefore, give the hon. Gentleman the indications that he would like, any more than he expects to have them. But we shall give top priority to industry. In the clamour of the Budget debate we should not forget what has already been done.
A number of measures have already been taken to help industry in this Budget and in past weeks. I shall list them, so that hon. Members will begin to realise that we are giving to industry whatever help we are able to give at a very difficult time for the economy.
The minimum lending rate has fallen by 4 per cent. since November. Our interest rates are falling at a time when the interest rates of nearly every other country are rising. Taken over a period of three months, our interest rates are now lower than those of America, Germany, France and a good many other countries. Since the interest rate is perhaps one of the most important factors in getting production going, and getting the economy going again, we should take credit from the fact that we have been able to reduce the interest rates by 4 per cent. in the space of the past four months.
Another factor of importance, which to a certain extent—but only a certain extent—is tied to this, is the exchange rate. It is now about 5 per cent. lower that it was at its peak at the end of January. To that extent as well, both those factors are operating now in the right direction and are of help to British industry. Indeed, the CBI estimates that each reduction of 1 per cent. in interest rates is equivalent to £350 million, so on that score, since November, some £1,400 million has been taken off the cost of industry.
The new stock relief scheme, mentioned by the Chancellor of the Exchequer, will put £180 million into industry this year and £450 million next year.
The industrial building allowance has gone up from 50 per cent. to 75 per cent. There are also the improvements and the relaxations that have been made in the development land tax. Those measures will be of value to the construction industry and to manufacturing industry over the next year.

Mr. Eric S. Heffer: Will the right hon. Gentleman tell us exactly how many jobs those measures are likely to create in the construction industry? Is not that a miserable approach to the construction industry, which needs something much more decisive than that?

Mr. Prior: I cannot give an estimate of the number of jobs. I am not certain that any measures can ever be designed with that end in view, but I am quite certain that over the next few months these measures will be of help to a number of industrialists who will be seeking to make up their minds whether to build new factories. That is the way in which these things happen. But I certainly could not put a finger on the number of extra jobs that the measures will create.
I now turn to energy prices. As a result of the working party that was set up by the NEDC and that reported at the last meeting of the NEDC, the Chancellor of the Exchequer and the Secretary of State for Energy have been able to announce that the external financing limits of the gas and electricity industries will be allowed to expand, so that in the gas industry £73 million, and in the electricity industry £43 million, will be available to offer reductions to those who are bulk users on a large scale of those two commodities. That will enable them to be considerably more competitive in relation to Germany and other countries.
There is in addition—I have not heard this mentioned once during any speech in the course of the debate—the very valuable £50 million of additional capital which is being made available to those who will convert their boilers from other forms of energy to coal over the next two years. I should have thought that that would have a warm welcome on the Labour Benches. It does not seem to have had one this afternoon.

Mr. Stanley Newens: Before the right hon. Gentleman leaves the question of energy prices, will he agree that the 20p on petrol will more than cancel out the trivial benefits to which he has just referred, and that industrialists from one end of the country to the other are up in arms about the effects of the Budget on their businesses? Does he agree with them?

Mr. Prior: The hon. Gentleman has picked out one aspect of the Budget and compared it with another, such as the increase in petrol prices. However, the Budget must be taken as a whole and the measures—[Interruption.] Opposition Members are trying very hard, but they are not doing much good.
The enterprise package for small businesses including the loan guarantee, the raising of the VAT threshold, the changes in tax reform and the new tax relief are only some of the 50 new measures that we have introduced during the past two years in order to help small firms. In addition, we have set up enterprise zones. From experience of their constituencies, hon. Members will know that there is enormous demand for small factory units all over the country and particularly in development and special development areas. Many of the new jobs that this country desperately needs will have to come from that area. Our measures to help small businesses will be of enormous aid in helping to create more jobs.
For the moment, I shall leave aside the details of the Budget. Too little credit has been given in our debates to our recognition of the need to cushion some industries from the effects of the recession. The difficult changes that accompany it are extremely difficult for a number of companies to cope with, particularly some nationalised companies. Changes should have been made over the past 20 years, but they have not been carried out. I shall give two examples of the way in which we have helped to bring about change. If we had not done so there would have been extremely serious unemployment problems. First, I refer to the money and assistance that we have given to British Leyland, the British Steel Corporation and to companies such as Rolls-Royce. Undoubtedly such assistance has had a major effect on the levels of employment in those industries. In the West Midlands, the small private firms that are involved with British Leyland welcome the assistance that we are giving that firm.
This morning I was delighted to read in the newspapers—I believe that it is also on the tape—that in the first 10 days of this month the Mini Metro has become the best selling car in Britain—[Interruption.] The Opposition now seek to take the credit for what has happened at British Leyland. Opposition Members would take the credit for anything. If they want to take the credit for what has happened at British Leyland I hope that they will also take the credit for the mess that they got it into originally. From the beginning, the right hon. Member for Bristol, South-East (Mr. Benn) had a lot to do with the mess that British Leyland got into.
The Mini Metro makes the point that if we can produce the right car of the right quality at the right time, the British people will buy it. In 1975 we produced 1,268,000 and we imported 34 per cent. of our total market. In 1980 we produced 924,000 and imported 57 per cent. of our total market. If we produced the right cars it would have a major effect on the activity not only of the car industry but of the component and steel industries. At Llanwern, South Wales, steel productivity is running at record levels,

which are equivalent to the best in Europe, if not the best in the world. We can achieve such success if we make the cars that require the steel. The whole of British industry can be helped by the sort of measures that we have taken.

Mr. Gordon Wilson: Does the right hon. Gentleman realise that the Government are allowing Linwood to go to the wall? Despite the right hon. Gentleman's comments about the "successes" of British industry, there is nothing in the Budget or in the Government's policy that will improve employment prospects in Scotland.

Mr. Prior: I do not wish to be so controversial as to get into an argument with the hon. Gentleman on the subject of Linwood. If productivity had increased over the past few years, and if the right goods had been produced at the right time, the Linwoods of this country would never have been closed. On Saturday the newspapers announced that Rolls-Royce had secured and retained the order from Eastern Airways. That is an example of what can be done with a good work force, good management and aggressive salesmanship.
For too long, management, the unions and the workers have sat back and thought that everyone else would earn them a living. If we were to get out of our problems simply by reflating the economy with a lot of extra consumer demand we would be driven straight back to all the problems that we had before. We shall continue to increase help to industry and to individuals wherever and whenever we can.
I turn to three special employment measures that we have introduced. This coming year they will cost over £1 billion. I refer to the temporary short-time working compensation scheme, the youth opportunities programme, and the community enterprise programme. Those three measures, together with the job release scheme, will cost over £1 billion. They are already helping 926,000 people to retain their jobs. That is a measure of what we are doing to help industry and to help people in a very difficult position.
I turn to the increased expenditure for this year. On special employment measures, £900 million is involved. For British Leyland and Rolls-Royce the sum of £800 million is involved. Above the amount allocated in last year's White Paper on public expenditure, £1,500 million goes to the nationalised industries. That figure is approximately the same as the amount being raised through extra taxation. Therefore, we have a perfectly justifiable case for saying that the extra money that must be raised via difficult and painful taxation will at least help employment and will help to sustain employment changes and investment in a number of vital industries.
Not enough money has gone into investment in both the public and private sectors. It is not a matter of one sector being good and the other bad, but of the rate of return on that investment. For years the Oppositon were prepared to put money into industries regardless of the rate of return on investment. The steel industry is a classic example of wasted money. The Labour Government refused to allow the 1973 White Paper to go ahead. They introduced the Beswick plan, which delayed the steps that should have been taken to put that industry on a firm basis. They allowed vast sums to be invested when the market was falling. As a result, we still have to prop up British Steel. That is a classic example of wasting a large part of investment.
In the past few years, too much has been spent on consumption. We have been spending and consuming that which we have not earned. At the same time, we have—to some extent—been consuming other people's goods. Those in work and their dependants have been largely shielded from the effects of the recession. In the three years from 1977 to 1980 real incomes for individuals have risen by 17 per cent. after tax. At the same time disposable income of companies has fallen by 25 per cent. Our continuing prosperity as consumers has been bought at the expense of unemployed and of a lack of investment. In other words, those in jobs are enjoying prosperity at the expense of the jobs and investment for tomorrow. One of the main thrusts in the Budget strategy is to bring about a change in that position.
There is no recognition of this by the Opposition. All that they have done is to take the TUC's £6,000 million boost which they announced in their strategy presumably—[Interruption.] They have not even done their homework. They never do their homework. The CBI asked for an increase of £1,500 million for each of four years. [Interruption.] I must tell the hon. Member for Fife, Central that that is different from the £6,000 million in one year, which is what the TUC has asked for.
The Opposition have asked for £6,000 million more now. [HON. MEMBERS: "Hear, hear".] If we add this year's PSBR of £ 13½ billion, that makes £19½ billion. The Opposition would have no increases in taxes and they would have indexed the Rooker-Wise amendment, so we can say without any shadow of doubt that had the Opposition's policies been followed the public sector borrowing requirement this year would have been well over £20 billion.
The Leader of the Opposition, to use his words, does not give a fig for the Chancellor's PSBR. It appears that no one gives a fig for him or for the Opposition, because amidst all the reactions to the Budget there has hardly been any mention of a Labour Party alternative. Tough Budgets usually shift attention to the Opposition, but not this Opposition. Virtually all the commentators have dismissed the Opposition's case as being totally disastrous. Put bluntly, in a nutshell the Opposition's case is spend, borrow, print and, when that does not work, bring in a prices and incomes policy to keep the lid on. It is hardly surprising that anyone pays any attention to them.
We know that many of the remedies and well-tried answers of the past 30 years are not on offer today. [AN HON. MEMBER: "Not from your lot"] Nor from any country in the world that believes in high employment, prosperity and an increasing standard of life. Other countries with a much greater record of success than we have are also running into trouble. A popular and easy choice was never open to us. The country understands that, even if Opposition Members do not.
We also understand what we are demanding from the whole country. We are in no doubt that today's sacrifices must be seen to be fully worth while in years to come. All this makes it crucial that, as the pick-up in the economy comes, every one of us responds in the right way. That applies to the unions, to management and to the Government. We have to turn our minds to how best to foster that response to ensure that our chance does not slip by, as has so often happened in the past 20 years. It is because I believe that the Chancellor had to introduce this

tough Budget and that the policies of the Opposition would be disastrous for this country that I ask my right hon. and hon. Friends to support the Budget and the Chancellor.

Mr. Eric G, Varley: For 32 minutes the House has listened to the Secretary of State for Employment, in a bit of a political knockabout, saying what he does not really think about the Budget. He must have searched the Budget Statement desperately for a passage or two that he could support.
The right hon. Gentleman was asked how the stimulus to the construction industry would help. He would not tell my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), but I can tell my hon. Friend that the stimulus in the Chancellor's Budget Statement is £25 million, and that that expenditure, which is not likely to arise before 1984–85, will not help the construction industry.
The right hon. Gentleman mentioned the coal boiler conversion scheme. That is welcome in itself, but £50 million over the next two years will not stimulate employment either.
One would not think that the right hon. Gentleman was the same right hon. Gentleman who, apparently, as part of a large faction of right hon. and hon. Gentlemen, has been leaking opposition to the very basis of this Budget to any journalists that he could get his hands on. Of course, not many journalists are easily available these days. Most of them have been corralled in the press room at No. 10 Downing Street in more or less continuous session, being told on behalf of the Prime Minister how gutless her Cabinet colleagues are. Meanwhile, back in the House, there has been scarcely a speech in support of the Budget from any of the Conservative Back Benchers who have taken part in the debate so far.
The debate in the House has been accompanied by an unprecedented debate in the country about the Budget. The verdict of almost every section of opinion has been overwhelmingly and vehemently against the Chancellor's proposals. The anger of the TUC has been accompanied by the despair of the Confederation of British Industry.
After the talks last Friday at No. 10, the Prime Minister's indefatigable press office described her discussions with representations of the CBI as "friendly and businesslike." But when the president of the CBI, Sir Raymond Pennock, was questioned on the subject, he said that he would rather describe the budget as "businesslike." Sir Raymond's comment on the Budget was:
This was not the 'business' Budget which had been widely trailed. It is something that we neither hoped for nor expected. It will penalise business and will increase prices, bankruptcies and unemployment.
Even the City has shown disapproval, as evidenced by the heavy fall in the Financial Times index.
While all these hostile and bitter reactions have been fully justified by the dimensions of the Chancellor's failure, the scale of the disaster that the right hon. and learned Gentleman and the Prime Minister have inflicted on the country can best be gauged if we set that catastrophe against the vainglorious objectives that the Government set themselves on coming to office.
I do not know how many copies of the Queen's Speech in 1979 survive in No. 10 Downing Street or in the Treasury, or whether the Prime Minister has ordered that all copies be shredded. That would be appropriate, because the Government's policies as proclaimed in it are certainly in shreds.
I providentially retained a copy of that Queen's Speech, and it is instructive now to read what is laid down about economic policy. It said:
My Government will give priority in economic policy to controlling inflation through the pursuit of firm monetary and fiscal policies. By reducing the burden of direct taxation and restricting the claims of the public sector on the nation's resources they will start to restore incentives, encourage efficiency and create a climate in which commerce and industry can flourish. In this way they will lay a secure basis for investment, productivity and increased employment in all parts of the United Kingdom.
After two years, not a word of that Queen's Speech has been fulfilled. The objective to which all else has been subordinated is the control of inflation, yet today inflation is about 3 per cent. higher than the rate that the Government inherited. That is before the addition to the inflation rate of the 2 per cent. by this Budget. It is before the rent rises, the fuel increases and the rate rises that are still to come.
What a price the nation has had to pay for the Government's obsessive subordination of every other aspect of our economic life to the mystical objective of controlling the money supply—an objective which has totally evaded the Government. By this Budget, they have had to admit the complete failure of their attempts to control public spending and borrowing. The cost to the nation of these policies would have been appalling even if the policies had succeeded, but the policies have manifestly failed, and this Budget is a confession of their failure.

Sir Frederick Burden: Does the right hon. Gentleman agree that the approaches to the International Monetary Fund by the previous Government, the help they received from that fund and their request to be bailed out, showed their lack of control of the economy?

Mr. Varley: I shall not avoid that question, because I am coming to the comparison between that period and the last two years. If the hon. Gentleman is patient, he will be able to make the contrast between that period and the period of the present Conservative Government.
The nation has had to pay an appalling price: the extraordinary fact that prices have been deliberately pushed up by a Government whose aim, according to them, was to control and reduce inflation; the initial folly of the VAT increase, from 8 per cent. to 15 per cent.; the regular increases in prescription charges, which have multiplied their cost fivefold, from 20p when Labour left office to £1 for each item.
Now there is the remarkable case of the increase in petrol prices. The House will recall the fury that greeted the proposal by my right hon. Friend the Member for Leeds, East (Mr. Healey) to increase the tax on petrol in 1977. The Prime Minister, then the Leader of the Opposition, responded immediately from this Dispatch Box. She said:
I think that we were all shaken … by the extent to which he has loaded extra taxes on the motorist, which will undoubtedly react very heavily on the number of people in the rural areas who have to use their cars."—[Official Report, 29 March 1977; Vol. 929, c. 292.]
The Prime Minister was shaken by that proposed increase of 5½p on a gallon, yet her proposal today is not 5½p but 20p. When Labour left office the price of a gallon

of four-star petrol was 84p. As a result of this Budget, it has risen to an average price of £1·55—an increase of 71p over the last 23 months.
The wider effect of the economy on the Government's deliberate deflation has been to push the country into the worst slump for at least half a century. Since Labour left office, industrial investment has fallen by 8 per cent., productivity in manufacturing industry has fallen by 4 per cent., and manufacturing production has fallen by 14 per cent. Firms dealing in bankruptcies, liquidations and company failures have become Britain's only growth industry.
What a sorry mess we have reached. In the first two months of this year alone, nearly 3,000 companies were wound up. The record is just as grim for the companies that have managed to stagger on somehow and survive in business. These are not the lame duck companies or the difficult companies about which our abrasive Prime Minister is so scathing. Some of the greatest names in British industry are reeling under the lash of her policies. One of the greatest hopes for the future, International Computers Ltd., is now in desperate straits. How that company must wish that it still had the protection of being partly owned by the National Enterprise Board.
Other major companies are in trouble. In the second half of last year, Fisons went into deficit. In the last financial year, Lucas Industries suffered pre-tax losses. The profits of Tube Investments have slumped massively. Imperial Chemical Industries has just gone into loss, and has endured its worst trading year since the 1930s.
These are the sombre achievements of a Government who promised, in that first Queen's Speech, to
create a climate in which commerce and industry can flourish".
But the impact on employment has been the harshest of all. ICI had 6,000 job losses last year, and its chairman, Sir Maurice Hodgson, expects a similar number this year. Lucas has suffered thousands of redundancies. Tube Investments had 5,000 redundancies last year and has already announced another 3,000 for this year. All over the country workers who are in work at all often have work for only part of the week. At the end of 1978, Labour's last full year, the number of workers in manufacturing industry stood off for the whole or part of the week—that is, those on short-time working—was 38,100. At the end of 1980, it was well over 500,000. By the end of January 1978 the number of workers covered by the temporary short-time working compensation scheme was 8,956. At the end of January this year it was 680,000, and the Secretary of State has just told us that it is about 900,000 now. Even on my figures, the increase has been 7,600 per cent. under that scheme alone.
The number of redundancies last year was half a million. The fall in employment in manufacturing industry last year was 750,000. All over the country the present Government's policies have taken their toll in a grim roll-call of unemployment, which is more than 1 million up on the level two years ago. Areas that were once prosperous now live under the shadow of unemployment.
We all remember how Saatchi and Saatchi had to round up the Hendon Young Conservatives to impersonate a dole queue in that notorious poster. We were told last weekend that the Tory Party has decided that times are so hard that it cannot afford so much work by Saatchi and Saatchi. I should be surprised if Tory Central Office was put off by the condemnation of Saatchi and Saatchi's methods by the Advertising Standards Authority. But if Saatchi and


Saatchi has another poster in mind, it can send its cameramen anywhere in the South-East. It can even send them to Conservative Central Office, where last week 40 redundancies were declared, and a spokesman for Conservative Central Office said that this was due to
inflation and the economic recession.
Unemployment in the South-East, in the last two years, has risen from 303,000 to 527,000. In East Anglia, represented by the Secretary of State for Employment, unemployment has risen from 5 per cent. to 8·4 per cent. In the East Midlands it has almost doubled. It is up heavily in the South-West. It has nearly doubled in Yorkshire and Humberside.
In the West Midlands, unemployment is up 117 per cent. That is the humiliation that the present Government have heaped upon a region which could once proudly call itself the heartland of British manufacturing industry. In the West Midlands today one worker in every nine is looking for a job.
In other parts of the country, the unemployment rate is even worse. In the North-West, one in eight is unemployed. One in eight is unemployed in Scotland as well. If one walks down any street in Wales, every seventh person one meets is likely to be out of work. It is the same in the Northern region. In Northern Ireland unemployment affects one worker in every six. It is the same sorry story from Dover to Londonderry.
I think that it was Disraeli who depicted the Tory Party as the party of two nations. The present Tory Prime Minister has succeeded in creating one nation—a nation sorrowfully united by the affliction of mass unemployment.
Unemployment is now biting deep. Twenty-one per cent. of all enemployed men have been out of work for more than a year; 40 per cent. of all unemployed men and 36 per cent. of all unemployed women have been out of work for more than six months.
But if one feature of this horrifying unemployment is more shameful than any other, it is the unemployment among young people. Under this Government, unemployment among school leavers has increased by 230 per cent. If there is one thing for which this Prime Minister will never be forgiven, it is the blighting of so many young lives. During the right hon. Lady's premiership, she has inflicted great damage on the country, but none is so unacceptable as the waste of a generation.
No one has described more starkly the difference between employment in Labour's last year and employment during the past 12 months than the Financial Secretary to the Treasury, who made a series of pledges on television yesterday about income tax reductions during the remainder of this Parliament. I can assure the House that the Opposition will file away the transcript of what the right hon. Gentleman said for ready reference in the next year's Budget debate and the Budget debate after that, if we get one.
In the Red Book for 1979, the Financial Statement and Budget Report, published and signed by the Financial Secretary, the right hon. Gentleman said about Labour's last year in office:
Unemployment fell slowly but steadily during the course of 1978. In December, United Kingdom unemployment (excluding school leavers under 18) was about 100,000 below the peak level of September 1977. Unemployment increased in the early months of 1979, but the rise seems to have been due to a combination of severe winter weather and industrial disruptions. By May, unemployment had fallen back to a level about 10,000

lower than in December … In the 12 months to December 1978, United Kingdom employment increased by around 190,000, a rise of just over ¾ per cent.
That is what happened during Labour's last year in office, which the House can contrast with the present Government's first 18 months, again usefully provided in the Red Book by the Financial Secretary. Last week, he said:
Between June 1979 and December 1980 employment in Great Britain is estimated to have fallen by over 1 million. … Unemployment rose thrugh 1980, with a monthly rate of increase of over 100,000 in the final quarter … Notified vacancies fell to around 100,000 in early 1981, significantly below the levels recorded during the last recession, … while the number of operatives on short-time working had increased over the same period from 30,000 to about half-million.
But unemployment will get much worse yet. That is made clear in the public expenditure White Paper published last week, which tells us that the Government's unemployment assumptions for the next three years are 2,700,000 for 1981–82 and 2,900,000 for each of the two following years.
Worst of all, it has all been for nothing. In that first bombastic Budget two years ago, the Chancellor of the Exchequer boasted that his reductions in the burden of income tax were as substantial as they were unprecedented. Very little, if anything, remains from the income tax handout at that time.

Mr. John Evans: Nothing.

Mr. Varley: In fact, we are now told that the income tax burden is greater today than it was when the Government came to power. How ironic is the promise in the last Conservative manifesto to help the low paid by raising tax thresholds. On Thursday, the Secretary of State for Social Services was forced to admit that this Budget actually widened the poverty gap. He did not believe that it deepened the gap, but he said that it widened it. That is a direct result of the Government's dishonourable abandonment of the Rooker-Wise-Lawson amendment.

Mr. Denis Healey: Where is the Financial Secretary?

Mr. Varley: The right hon. Gentleman has probably gone to Zurich, as he did a few weeks ago, to tell people there that taxation will go up even further.
Two years ago, the Minister of State, Treasury, boasted to the House that
it would have been impossible for the amendment to succeed without Conservative votes in the Standing Committee "— [Official Report, 27 June 1979; Vol. 969, c. 576.]
That provision has now been ditched. Even by the shoddy standards of this Administration, it is still impossible to understand how the Financial Secretary can honourably remain a member of this Government.
Far from falling under this Government, the tax burden as a whole has actually risen. As a proportion of the gross domestic product, taxation was about 40 per cent. when Labour left office. With this Budget, it will be not 40 per cent. but 48 per cent.
In these days of complete failure, the Prime Minister has taken to standing with her hand on her hip delivering little moralistic lectures to the nation. The latest boring instalment came last Wednesday when she made The Guardian Young Businessman Award to Mr. John Gardiner, a first-class businessman and a gentleman who last achieved national prominence 15 months ago when he


took part in the mass resignation of the National Enterprise Board because he could not stand the policies of the Secretary of State for Industry.
Last Wednesday, the Prime Minister really got carried away. She stamped her foot and had a public tantrum. In the most disagreeable way, which was later transmitted for our edification from our television screens, she told the nation:
I think one of the most immoral things you can do is to pose as the moral politician demanding more for health, more for education, more for industry, more for housing, more for everything and then when you see the bill say 'No. No. I didn't mean you to pay tax to pay for it.'

Hon. Members: Hear, hear.

Mr. Varley: I suspected that I would get a cheer for repeating that comment of the Prime Minister's, and I have not been let down.
What are the facts? The right hon. Lady says that we have to pay more tax so that we can spend more on health. But we are paying 20 per cent. more in tax to get a 2 per cent. increase in health expenditure. The right hon. Lady says that we need to pay more tax so that more can be spent on education. But taxation is going up while expenditure on education is down by £650 million since Labour left office. The right hon. Lady says that more taxation is necessary so that more can be spent on industry. But spending on the support schemes of the Department of Industry is down 30 per cent. from what it was in Labour's final year.

Mr. Anthony Beaumont-Dark: Will the right hon. Gentleman give way?

Mr. Varley: I have not finished. I may give way to the hon. Gentleman in a moment, but there is more to come, and I think that I know the point that he wishes to make.
The Prime Minister says that we need to pay more tax so that we can spend more on housing, but she has cut housing expenditure since Labour left office by £1,600 million. What dishonesty and deception that is.

Mr. Beaumont-Dark: Will the right hon. Gentleman also tell the House where £7 billion has gone instead of on the National Health Service and instead of on education? Of that sum, £2½ billion has gone on Clegg awards to the Civil Service and £5 billion has gone to the British Steel Corporation, British Leyland and everything else that the Labour Party is supposed to stand for.

Mr. Varley: In a moment or two I shall tell the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) where the great proportion of this money has gone. The Secretary of State for Employment knows where it has gone.
We are paying billions of pounds more in taxation, but the nation is being taxed to finance unemployment. The increase in unemployment since this Government came to office is costing the nation £6 billion a year, and that is in cash terms; it is impossible to measure the indignity, the misery and the human degradation.
How much better it would be if that £6 billion was being used on education, housing and industrial support, in creating jobs and providing hope for those now in despair. It is because this Government are squandering financial

resources and at the same time destroying the nation's human resources that the Opposition will vote against this Budget tonight.

Mr. Norman St. John-Stevas: I am grateful for the opportunity to speak. This is the first opportunity that I have had to speak in the House since I ceased to be its Leader two months ago, I hope that in those circumstances the House will allow me to preface my reflections on the Budget with some brief personal remarks.
Leaving high office is a notoriously traumatic experience. It has often led people to bitterness, a severing of old loyalties, to losing any sense of proportion and, what is perhaps the same thing, any sense of humour. I am happy to say that I have been preserved from all such undesirable side effects.
I was grateful for the opportunity I have had to serve this Government and, even more, to serve this House. With the single exception of your position, Mr. Speaker—which by universal consent you fill with a distinction that will number you among the great Speakers—there is no higher honour that a Member can have than to be Leader of the House. The essence of the position lies in the title. One is Leader of the whole House, not of any part of it. I congratulate my successor, my right hon. Friend the Member for Cambridgeshire (Mr. Pym), on continuing in that tradition.
Government office has its compensations, but it also has its drawbacks. Ministers are not free to express individual views in public. [Interruption.] That is the constitutional rule which I myself have always obeyed. For that reason, among others, I declined the post of Minister of State in the Department of Education and Science that the Prime Minister offered me. At a time of major political turmoil, when men and women are abandoning the allegiances of a lifetime for reasons of honour and conviction, I wished to be free to make a contribution from the Back Benches. It will be an individual contribution, but I hope that it will always be within the parameters of respect for a Government of whom I was recently part and within the historic traditions of a party that has survived so long precisely because it has concerned itself with social issues and is based—I need not remind my right hon. and hon. Friends in the centenary year of Disraeli's death—on the concept of one nation.
I congratulate my right hon. and learned Friend the Chancellor of the Exchequer on two aspects of the Budget. First, on the basis of its own terms, it is an exercise in intellectual consistency and rigour. Secondly, I congratulate my right hon. and learned Friend on his courage. However, I must enter a caveat at once. I was astonished and indeed horrified to see included what is, in effect, a retrospective levy on bank profits. That was a point made earlier in our debate by my hon. Friend the Member for Winchester (Mr. Browne). That tax is wholly inconsistent with the main thrust of the Government's economic policy which is to legitimise once again the notion of profit. It consitutes a sacrifice of principle to expediency.
Of course, there will be no popular rallying to bankers. I have no doubt that the extra cash is useful. However, it is a sowing of dragon's teeth that will bear a later harvest. My right hon. and learned Friend has led the way. Others, less well intentioned, will undoubtedly follow.
The Chancellor's courage is self-evident. He has stood up to a barrage of criticism from outside the House and, indeed, within it. The one section of the Budget that has commanded unqualified support in all parts of the House is that on small businesses. That is right. As the experience of the United States economy shows, more jobs are provided by the expansion of small businesses than from any other single source.
The loan guarantee scheme and the provisions for business start-ups in this Budget, taken with the concessions on corporation tax and the tax relief for small workshops in the previous Budget, add up to a charter for small businesses. I hope that the skill that went to make up this package will be matched by the enthusiasm, vigour and imagination with which the contents of the package will be made known throughout the country.
I turn to the wider issues involving industry in general. It is at that point some doubt begins. I do not quarrel with the Excise duties that have been raised, painful though they undoubtedly are. I believe that there is a clear economic case for the increase in tax on drink and tobacco, and even on petrol. However, I fully understand the anxieties of many of my hon. Friends. After all, we are in politics and not economics. There are limits to the burdens that any party can place upon its natural supporters. The Tory Party is still rooted in the land and the countryside. It is on the constituency that a disproportionate share of the burden will fall.
My doubts centre on the use to which the increased revenue will be put and the way in which the balance has been tilted away from industry and towards a reduction in the projected public sector borrowing requirement. Is not there a danger that £10·5 billion will constitute a totem when in fact it is not more than a forecast and subject to all the errors and variations of forecasts? I accept that there must be a broad consistency between fiscal and monetary policy, but there cannot be an exact relationship between them. If there were we should not have been able to have the very welcome reduction in interest rates that took place in November.
If one looks back to the forecasts for PSBR of £8·5 billion in the last Budget one sees how impossible it is to treat this part of economics as an exact science. I fear that there will be a repetition of history—that industry will not be sufficiently stimulated, that unemployment will increase, and that the deficit will rise because benefit payments will have to be paid and there will be lost revenues. I fear that there will be not a virtuous but a vicious circle.
I certainly welcome the measures to help British industry. The reduction in interest rates will be a major help, but I fear that the reduction will not decrease the value of the pound for long. I welcome the measures for stock relief and those to help the large-scale users of gas and electricity. I know from experience of factories such as the English Electric Valve Co. in my constituency, what a heavy burden is placed upon companies by energy charges. Yet I feel that the measures do not go far enough.
I wish that two proposals had been included in the industrial package that would have made it as important as the package advanced for small businesses. I should have welcomed a reduction in the national insurance surcharge, which really amounts to a poll tax. The CBI has pressed for a 2 per cent. reduction. Surely, it might have been within the tolerances and margins of error of the calculations on PSBR to make such a concession?

Secondly, despite the technical, contractual issues that are involved in reducing the tax on heavy fuel oil, I had hoped that something would be done in that regard.
There is another major danger to which I draw the Chancellor's attention, namely, the lack of demand in the economy. I do not want to get involved in a semantic argument about what is inflationary and what is disinflationary. If I did so, I know that it would have an alarming effect on my right hon. Friend the Financial Secretary to the Treasury. Like Bagehot's Englishman on the Continent, he is ready to blow up when the word "deflation" is mentioned in connection with this Budget. However, whatever the Chief Secretary argues about final demand—in fact, that has largely been nullified in the past by price increases—I ask my right hon. and learned Friend the Chancellor to consider whether there will be enough demand in the economy during the coming year.
Let me put the argument in a more homely manner. British industry has to sell to someone, but to whom? There are only three sources of demand. The first is the consumer, but with the increase in indirect taxation of about £2½ billion and the increase in national insurance contributions of £1 billion, there will be no increase in demand from that source.
The second source of demand is exports. Exports have held up remarkably well, but the Chancellor's own forecast, in table 11 of the Red Book, shows a reduction of 5½ per cent. in exports in 1981. That is what is forecast, and the reduction will continue into 1982 at a reduced rate. So there is not much chance of an export-led revival there.
The third source of expansion of demand is from capital investment in the public sector. Capital investment there has fallen with appalling regularity over seven years. As The Times pointed out in a leader the day after the Budget,
In 1974 one-fifth of public expenditure was on capital last year it was down to one-tenth".
Successive Governments have taken an easy way out by cutting capital rather than current expenditure. Part of the story can be read, again in table 11 of the Red Book. In 1980 there was a 16 per cent. reduction in capital spending in the capital sector, followed by a 23 per cent. reduction in 1981, and a 7½ per cent. reduction is forecast for the first half of 1982.
Those figures are significant, because they show the scope for a programme of limited capital reflation that exists. I am not arguing for a general reflation on the lines suggested by the CBI and the TUC. I am asking the Chancellor to consider a programme to be initiated later in the year, to put some more demand, through capital investment, into the economy. I hope that my right hon. and learned Friend will be able to give us some encouragement in this respect. That demand has run like a burden or a leitmotif through many of the speeches from this subject the House in this debate. There was the speech made by my right hon. Friend the Member for Taunton (Mr. du Cann), who advocated the use of private capital. He made the point, speaking with all the authority of his position as Chairman of the Select Committee on the Treasury and Civil Service.
I hope that the Chancellor will bring forward schemes—or at least not close the door on schemes—involving an increased expenditure of private and public capital. There is a wide range of choices, including electrification of the railways, improvement of the water system, measures for the conservation of energy, and one or two special capital projects. The Channel


tunnel has been mentioned. Perhaps I may suggest another—the new British Library, which will be of immense importance for our future in the development of information techology and the sale of factory systems. Given the spare capacity in much of British industry and in the construction industry, none of those projects would be inflationary.
A factory in my constituency has put into operation the Chancellor's principles. As a result, the work force has been reduced and there is a much higher degree of efficiency, but today that factory has a 25 per cent. spare capacity, which could be taken up without any inflationary effects. I appeal to the Chancellor to give the country some hope on these issues when he speaks tonight.
I want to bring one final matter to the Chancellor's attention. Many of us are uneasy about the wisdom of seeming to base a whole economic strategy on a single set of monetary aggregates of dubious reliability. Of course, control of the money supply is one of the weapons at a Government's disposal to promote a prosperous economy. It is one, but there are others, such as the promotion of investment and the moderation of wage claims.
Inflation is a moral as well as an economic evil. I have said that many times. It undermines confidence in our financal institutions and, ultimately, our political institutions. But unemployment is a moral evil, too. The loss of a job involves personal humiliation, a loss of dignity, and a feeling of diminishment as a human being. It leads to strains and tensions in the family; it can cause want which leads on to other social evils, such as vandalism, delinquency and crime. One cannot dispose of the problem by the simple statement that if we conquer inflation we shall solve our employment problems. If we conquer inflation it will be easier to deal with unemployment, but much more will have to be done in that regard.
It is not acceptable morally, nor is it even sensible economically, to speak as though we could pursue one economic aim to the exclusion of all human and social values. Man is a moral being first and an economic being second. Of all parties, I believe that the Tory Party should be the first to recognise that. I believe that we do recognise it, but we do not always speak as though we do. Not the least of the responsibilities that rest upon our economic Ministers is that of demonstrating that we have the means to reduce unemployment and also of fashioning a discourse to demonstrate that truth both to this House and to the country.

Mr. J. Enoch Powell: A king of Sparta who had been deposed was mocked by a member of the public who asked him what it was like to be a private citizen after having been a king, to which the answer was "Well, at any rate, I have tried both, which is more than you have". That is something that the right hon. Member for Chelmsford (Mr. St. John-Stevas) and I have in common. I congratulate him on the early use that he has made of the freedom which attaches to a private status.
I associate myself with one criticism that the right hon. Gentleman made. That was his reference to the tax upon bank profits. I agree that that is a precedent of very doubtful and ugly consequence; but there seemed to be implicit in the rest of his speech the fallacy of assuming

that, because a magnitude is difficult to define and difficult to predict, therefore that magnitude is unimportant. It is quite possible for something of immense, indeed critical, importance to be of such a nature that its size cannot always be accurately foreseen. However, much of what I would say in response to the latter part of the right hon. Gentleman's speech I can comprehend in bringing the attention of the House back to what I think was in some ways the most important speech in these four days of debate. That was the speech of the right hon. Member for Stepney and Poplar (Mr. Shore) at the beginning of the second day.
The right hon. Gentleman, unlike many others and unlike the right hon. Member for Chesterfield (Mr. Varley) this afternoon, did not shirk posing, even in brutal form, the antithesis and alternative which is before the House in this debate and which, therefore, is before the country. It came to a sharp point in the passage where he referred to the address of the right hon. Lady the Prime Minister in St. Lawrence Jewry. This is what he posed to her; "There are alternatives: one is inflation, the other is unemployment. You," said he, "and the Government have chosen unemployment rather than inflation."
I believe that the right hon. Gentleman was perfectly correct, at any rate in the short term, in saying that there is here a true antithesis and alternative. There are not many assertions in this field which one would dare to make and say that they were unlikely to be controverted; but this one I would venture, that if we could contrive a rapid and severe increase in inflation over the next 12 or 24 months, we would see an equally rapid and massive recovery in the level of employment.
I do not see how it can be denied that in the short term the escalation of output prices in advance of input prices stimulates employment. That was the alternative that the right hon. Gentleman, with great candour—a candour that has been little matched—was advancing; and no one could complain that in his speech he failed to offer a prescription which corresponded with his diagnosis, and with the opposite position that he took to the right hon. Lady the Prime Minister in the choice of Heracles.
The right hon. Gentleman said that the Government should not be reducing purchasing power by £5,000 million through the Chancellor of the Exchequer's taxation proposals. Incidentally, I would take issue with the notion that if public expenditure includes a certain sum we are taking that sum out of the rest of the economy any more in raising it in taxation than we would be in devaluing all existing currency to that extent by inflation or in taking it out of savings which would otherwise be directed into other channels. However, there at any rate, is one of the propositions of the Opposition and their official spokesman: they reject the £5,000 million increase in taxation.
That is not the Opposition's only proposition, assuming—as I hope I may—that I am correct in regarding the right hon. Gentleman's proposals as not so much alternative as cumulative. I should therefore remind the House of his proposals on the other side of the account, though I do not think my quotation is comprehensive:
The electrification of the railways….a project…well worth pursuing…clear need for an enhanced housing programme, for hospital and prison building…for new investment in our ageing water and sewerage systems. A number of road programmes should undoubtedly be brought forward.


That is by no means a comprehensive extract from the right hon. Gentleman's speech. This part he did not cost, and I am therefore dependent to some extent upon his agreement or disagreement when I venture upon some tentative figures. It seemed to me that a fair assessment of what might be implied in such proposals as those would be something between £5,000 million and £10,000 million. I hope that I have not overdone it. If I have, no doubt the right hon. Gentleman will intervene to put me right.
There was also a third feature in his speech. He was quite clear about his view of the effect of the exchange rate of the pound. It
has acted as a tax on our exports and a subsidy to our imports, the last thing which a trading nation such as ours wants or can afford."—[Official Report, 11 March 1981, Vol. 1000, c. 912–16.]
Part of the Opposition's policy, then, is to bring down by Government action the present exchange level of the pound.

Mr. Michael English: Not the green pound.

Mr. Powell: No, not the green pound. I shall let that pass.
The right hon. Gentleman understands as well as any of us the method by which a Government reduce the exchange rate of their currency. They do so by purchasing other currencies and selling their own. It is therefore an exceedingly expensive business, as countries such as West Germany and Switzerland have from time to time discovered. Here again the right hon. Gentleman did not cost this part of his proposals; but I want to be modest, and I therefore put the figure at some £4,000 million or £5,000 million. After all, one must make massive purchases of foreign currency to succeed in such an exercise.
The right hon. Gentleman therefore quite consistently said that this was the way to produce inflation: to increase the deficit, by operating on both sides of the equation, by between £15,000 million and £20,000 million.

Mr. Peter Shore: indicated dissent.

Mr. Powell: That is too high, is it? [HON. MEMBERS: "Answer."] I am not getting from the right hon. Member for Stepney and Poplar all the assistance for which I would have hoped, and so I must continue as best I can. Well, I will take the lower of those figures—it is the lowest I could possibly manage—some £15,000 million additional to that monster that the right hon. Gentleman has talked about, the public sector borrowing requirement.
I have no doubt the right hon. Gentleman is correct in saying that that would go far towards achieving his object of a howling increase in inflation over the next 12 or 24 months. That is his object, and he would intend—he says that he would intend, and I am sure he believes that he would intend—to go that way about it.
I must admit that in the latter parts of the right hon. Gentleman's speech—I regret this very much—there were some slight signs of hesitation or uncertainty. There was even a tendency once or twice to try to have it both ways, to say "We can have massive inflation while not needing to have any inflation at all." There was one passage, which will be familiar to those of us who have lived through some earlier Parliaments, in which the right hon. Gentleman strayed into referring to
cementing with"—

both sides of industry—
an agreement on a counter-inflation policy."—[Official Report, 11 March 1981; Vol. 1000, c. 918.]
This is our old friend "solemn and binding", Solomon Binding. This time he is immortalised in cement, but it is Solomon Binding all right.
We understand very well what is the thinking behind this: the Government pump massive quantities of additional money into the economy, but, marvellous to relate, these do not result in an increase of wages or prices because there is "solemn and binding agreement with both sides of industry". I shall not rely on the fact that it has never turned out that way. I shall rely on a more serious difficulty.

Mr. Heffer: When the right hon. Gentleman says that it has never worked out that way, is he ignoring the experience of the United States under Roosevelt? Is he not also ignoring the fact that during the first period of the Weimar Republic inflation was brought under control, but there was then massive unemployment which led ultimately to the rise of Hitlerism and Fascism? Will he answer that point?

Mr. Powell: I have great respect for the attention with which the hon. Gentleman has devoted himself to the study of these matters for many years; but when he cites against our experience in Britain the actual or alleged experience of other countries I become doubtful. I remember a period, at the inception of this era of prices and incomes policy 20 or 25 years ago, when there were islands of the Hesperides overseas where they had done it and got away with it. For instance, Holland knew how to do it, so why could not we? Sweden could do it, so why could not we? In the end it turned out that they had not done it and they could not do it; and in the end the traveller's tales brought from distant lands bore no comfort to us in our own experience.
However, I rely not upon our uniformly unsuccessful experience with our old friend Solomon Binding, but upon something that goes more directly to the case of the right hon. Member for Stepney and Poplar. I shall grant him, as an hypothesis, that by "cementing" such an agreement, he actually does prevent inflation. Let us suppose that he succeeds and that there is no inflation. The right hon. Gentleman's policy has then failed; he has destroyed the very injection into the economy by which he intended to summon up full employment out of the depths of recession. If he could succeed in preventing inflation, he would succeed in neutralising the very antidote that he criticised the Government for rejecting.
The right hon. Gentleman had another hesitation, another sideline, which has been mentioned more than once in different parts of the debate. He said that of course we could borrow another £15,000 million and not cause inflation, because the stuff was lying about all over the place unused. We would not be robbing others or removing it from other applications: for that £15,000 million would not otherwise be invested, here, there, or anywhere, because it represented merely idle balances—it was lying inert.
The right hon. Gentleman need not worry. That would give him exactly the same effect as if he had printed the £15,000 million. What difference is there between obtaining the money from bank vaults where, hypothetically, it lies inert and then casting it on to the market, injecting it into the economy, and simply ordering the stuff


from the Government printers? In either case the result is exactly what the hon. Gentleman wants—he need not worry—the recipe for achieving his cure, his antidote, his specific, namely, roaring inflation during the next 12 or 24 months.
I have not simply paid tribute to the candour of the right hon. Gentleman's speech. I have also stated my belief that the results for which he hopes would indeed follow from the course of action that he sketched out. "But tarry, there is something else"—there is "the coming on of time". What happens afterwards? We have some experience of that, because we have been here before, although not, of course, on the scale contemplated by the right hon. Gentleman. When I listened to his speech I could imagine Lord Barber looking down from some balcony
with eyes of soft humility and wonder, love and awe
upon his pupil and follower who had so far exceeded not simply the achievements but the imaginations of his predecessor. We know what happens. It is not something due only to an obliquity or peculiarity of the British. It is something that lies within the nature of inflation, namely, that sooner or later—and the faster the sooner—we have to stop and, when we have stopped, we recoil. Then we reap, inevitably and invariably, but now upon an increased scale, the very miseries, the very evils, the very dislocation, that the right hon. Gentleman purports to cure by his specific.
I am not accusing the right hon. Gentleman himself of intentional cruelty towards, or deception of, the British people. But any Government who followed, or any House of Commons which supported, his prescription and proposal would indeed be cruelly betraying, by simply deferring in order to reap in more intense measure the evils from which they suffer, the people who sent them to this House.

Mr. Christopher Brocklebank-Fowler: During the course of my maiden speech in March 1971 I reminded the House of the motto of my eighteenth century predecessor, Sir Robert Walpole, which was "Say what you think." I remarked that, although that practice is unfashionable in some contemporary political circles, it is the first duty of any Member who represents a constituency in Norfolk. Once again I intend to say what I think, in the knowledge that it is often unwise, and that today it will be especially painful.
During the 1979 general election, together with other Conservative candidates, I fought on the basis of the Conservative Party manifesto which promised, among other things, a substantial reduction in taxation, to control inflation, to ensure that genuine jobs were created in an expanding economy, that help to firms in difficulties would be temporary and tapered, and to ensure that our agriculture and food industries remained profitable and competitive. In addition to those general promises I promised my electorate, in a personal letter to fight in Parliament on issues that were important locally, and to work for electoral and parliamentary reform so that Government would become more responsive to people's needs.
What is the Government's record on keeping their promises? Taxation generally has increased during the

Government's tenure of office. This year, for the first time in 10 years, there is to be no increase in personal allowances. Although there is no change in the rate of personal taxation, the abolition of the Rooker-Wise amendment allowances represents an increase in direct taxation of about 15 per cent. In addition, by the Government's own admission, a further 10,000 people have entered the poverty trap. The Government's failure to achieve their targets for cuts in public expenditure holds out little hope for substantial tax cuts during the remainder of this Parliament.
After an initial and substantial rise in the rate of inflation, occasioned partly by the Government's inheritance from that lot on the Opposition Benches and the increase in oil prices but exacerbated by the Government's dogmatic opposition to any sort of incomes policy, even in the public sector, and the swingeing increase in VAT, there are now welcome signs of falling inflation. However, the social cost of the Government's tough deflationary policy is, in my opinion, unacceptable. According to recent EEC figures, Britain is high in the European unemployment league, with an increase over the past 12 months of about 64 per cent.
There have been substantial decreases in gross domestic product, industrial production, manufacturing production and capital investment in manufacturing. The Government have knocked the stuffing out of British industry, and, despite a number of useful measures in the Budget to help small businesses, they have created conditions which have caused a record level of bankruptcy and have put hundreds of thousands on to the dole queues.
The Government's economic forecasts assume that total unemployment will rise steadily to more than 3 million by 1982 and will stay at that level until 1984. In West Norfolk alone unemployment has risen from 2,981 to 5,276 since February 1980. In King's Lynn it has increased from 1,572 to 3,079, an increase in one year of over 90 per cent. Unemployment among school leavers in West Norfolk has increased from 139 to 297 during the past 12 months. When one considers the number engaged on youth opportunity programme schemes, many of whom may be only temporarily employed, the total increase is from 243 to a staggering 633.
I pay tribute to my right hon. Friend the Member for Lowestoft (Mr. Prior), the Secretary of State for Employment, for the battles that he has fought in Cabinet to secure more funds for employment creation schemes. However, it is clear that the prospect of secure employment for the majority of those now unemployed is remote unless there is a major change in the Government's policy. So much for the promises that jobs would be created in an expanding economy.
The Government promised that help for firms in difficulties would be temporary and tapered. The Government failed totally to grasp the point that if such a promise were to be made a reality it would be necessary to establish industrial targets and to have a strategy for partnership between Government and industry of a sort similar to that adopted by our most successful major competitors such as France and Japan. However, the Government's theoretical opposition to public support for industry has caused them, under the threat of even higher unemployment, to find more public money for this purpose than might have been neccessary had they approached the problem less dogmatically.
For example, I have no doubt that the Government's recent decision to bail out British Leyland yet again and to promise a further £1,000 million of public money could have been avoided. During my much criticised and totally misunderstood one year as a consultant with Datsun (UK) Limited, which ended in December 1980, I brought back from the vice-president of Nissan in Japan an offer in writing to discuss with the British Government a feasibility plan for a partnership between Nissan and the Government for a major rescue operation for British Leyland. That offer was conveyed to five members of the Cabinet. Had serious action been taken upon it there was the chance that a substantial Japanese investment and a transfer of high technology to British Leyland would have laid the foundation for a much larger British motor industry than now seems likely or possible.
Close partnerships between the Government and British industry, between the Government and British exporters and between the Government and sources of foreign technology and investment are essential if we are to find effective and, in terms of public sector finance, inexpensive solutions to the problem of enabling British industry to adjust more rapidly to international competition and to ensure that the manufacturing sector of our economy provides a greater proportion of our national wealth than at present.
Small amounts of public funds in support of research and development, for example, or by way of soft loans to private firms with good ideas and able management, can be far more effective than large disbursements of public funds in expensive industrial disaster relief.
The Government promised that our agricultural and food industries would remain profitable and competitive. I can only report, with sadness, that three major food processing companies in or near my constituency have recently closed, throwing hundreds of my constituents out of work. During the past 12 months farm incomes have decreased by about 24 per cent. Agriculture and food processing are the two major sources of employment in my constituency and these experiences are especially unacceptable to my constituents, not least because agricultural wages are far too low for such a skilled and productive work force.
I promised to fight in Parliament on issues that are important locally. In my constituency nothing that my right hon. and learned Friend the Chancellor has introduced in the Budget could be more damaging than his proposal to increase the price of petrol by 20p a gallon. Country people are greatly dependent on the motor car to get to work or to obtain access to the services that they need. Rural bus services have declined substantially and in many parts of my constituency they scarcely exist. Consequently, there is a car ownership level of 0·85 per cent. per household in rural areas and 81 per cent. of all journeys are made by car. In each instance the figure is 20 per cent. higher than in urban areas.
In constituencies such as mine the increased cost of daily travel to and from work in an average family car could add £1 a week to the family budget. Bearing in mind the substantially lower salaries in rural areas, the rapid diminution of local services, the increasing reliance on mobile shops and high local delivery charges, the cost of living for the majority of my constituents would be substantially increased if my right hon. and learned Friend's proposal were to he agreed by the House tonight.
I promised to work for electoral and parliamentary reform. Apart from the considerable achievement of my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) in instituting our new system of Select Committees, there is no indication that the Government will consider long overdue reform of the House of Lords or a change to proportional representation, which would ensure a wider choice for the electorate and a fairer representation in the House of the electorate as a whole.
So much for the promises I made and for the record. As a constituent wrote to me last week "What the hell is this Government trying to do?" My work on the Select Committee that is dealing with foreign affairs—I refer especially to the study that we have been making of the Brandt Commission report—has led me inexorably to the conclusion that it is foolish to consider Britain's problems in isolation as if they are not affected by the problems of countries that are our sources of raw material and consumers of our manufactured goods and services. At a time of international recession, the Government have a particular responsibility to create employment opportunities at home without fuelling inflation.
In a lecture to the Economists Society earlier in February, my hon. Friend the Member for Horncastle (Mr. Tapsell) said that one cannot spend one's way out of deflation; one can only expand one's way out of inflation. How much I agree with him. It is a matter of great regret to me that the Government did not differentiate between public capital expenditure and public current expenditure in tackling inflation when they first came to office. In the current domestic slump, it would have been sensible to increase capital expenditure on infrastructure projects to provide employment for the currently unemployed and to raise tax revenue from them rather than allowing their enforced idleness to contribute substantially to public current expenditure. In addition, infrastructure projects such as the desperately needed east-west roads in my region or a constructive energy conservation policy for householders could have helped to improve our national efficiency.
The Government would also have been wise to pay more attention to the importance to Britain of our Third world trading partners. It is worth remembering that our balance of trade surplus with the Third world is almost as large as the total balance of payments surplus from all sources. How long will it be before the Government realise that a combination of aid to developing countries and improved access for the products of those countries to our markets can substantially improve export opportunities abroad and help to create additional employment at home?
The Government expenditure plan White Paper, in table 1.11 on page 25, says that overseas aid is to be further cut in the next three years by £7 million, £10 million and £10 million respectively. I suppose that that is just another unavoidable cut in "handouts". The Prime Minister would do well to learn that aid is a form of national investment. Disbursements last year of £997 million produced a £2,100 million trading surplus. That is not bad business.
Expenditure on diplomacy and aid is a more cost-effective way of protecting Britain's interest in some parts of the world than certain expenditure on arms, yet I note from the White Paper that total expenditure this year on overseas representation and aid amounts to only one-sixth of the defence budget.
The Government's part in postponing the summit to give consideration to the important issues raised by the Brandt Commission report is another indication of the insularity of their philosophy.
My confidence in the Government is further undermined by the reports of substantial disagreement in the Cabinet about the economic strategy. Yet, although no less a person than the present chairman of the Conservative Party resigned from office on a matter of principle about 20 years ago, it is a matter of great regret that members of the present Cabinet, who disagree profoundly, as I do, with the Government's policies are not showing a similar degree of courage.
In 1938, the Right Honourable Harold Macmillan, wrote in his book "The Middle Way":
The theories of free capitalism or state socialism are remote from the immediate practical needs and possibilities of our time. The pressure of economic and political necessity is too great today for us to afford the leisure to conduct any longer the barren argument between them".
In reviewing his re-issued book, in 1966, I wrote of his philosophy:
It was born of a horror that mismanagement of the domestic economy could once again lead to massive unemployment and social disintegration".
That is what we face today and yet the barren argument goes on in the House, and the sensible and consistent management of the economy is clearly still impossible as Governments change direction as often as Governments change, in a barrage of rhetoric and amateur posturing according to the prevailing party political fashion.
Red v Blue and Left v Right are like an eternal wrestling match which is fixed through the "usual channels", with no real winners except the promoters in the respective Whips' Offices. The country, industry and the public at large want and deserve a new deal.
For those reasons I cannot vote for the Government's economic programme or for this Budget. I shall not abstain because, in all the circumstances, it would be dishonourable. I shall vote against the Government tonight and I have written to the Prime Minister conveying my decision to resign the Conservative Party Whip.
A distinguished predecessor as Member for King's Lynn, Lord George Bentinck, in the mid-nineteenth century, after eight years of silence in the House and successful horse racing outside it, having supported Canning and then Peel, backed Disraeli in his long climb to become the great reforming Tory Prime Minister who aspired to one nation. I propose to follow his radical example in the pursuit of change and to seek to join the Council for Social Democracy in which I hope to help to form a new party and to develop a programme for stability, national unity and national renewal, which I judge to be vital if the country is to become truly one nation at home and is to play a leading part in international efforts to solve the problems of poverty, malnutrition and disease which afflict a wholly unacceptable proportion of mankind, on whose prosperity we depend so much for our future.

Mr. Joel Barnett: While I cannot agree with the political choice of the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler), I congratulate him on a sincere and brave speech. I agree with him that the social cost of the Budget is unacceptable.
The right hon. Member for Chelmsford (Mr. St. JohnStevas) made an equally brave speech. He said that the Conservative Party had survived for a long time because of its social concern. If it follows the path of this Budget, it does not look likely to survive much longer.
The right hon. Member for Down, South (Mr. Powell) made a—[Interruption.]—delightfully amusing speech——

Mr. Speaker: Order. The House can now relax and listen to the right hon. Member for Heywood and Royton (Mr. Barnett). It is difficult to do so when a lot of chattering is going on.

Mr. Barnett: The speech of the right hon. Member for Down, South was delightfully amusing, but it was built on a false premise. I was surprised that it came from the right hon. Gentleman, with his experience in the Treasury, although that was a little time ago. His speech was built on a wholly false assumption. He should have known that with something like the PSBR, to assume that one plus one equals two is wholly false. That was the underlying, basic falsity of the premise on which he based that amusing speech.
However, whether or not one is a monetarist, there is a limit to how much one can or should seek to borrow. I make no bones about it. The Chancellor is entitled to ask his critics "What would you do? How much would you borrow?" I propose to try to answer that question. In the Labour Government we tried to limit borrowing as defined by the PSBR.
In his speech in the House last Wednesday, the Chief Secretary to the Treasury put forward a remarkable argument. He stated that because the borrowing requirement set last year for 1981–82 was £7½ billion and it is now £10½ billion, that was reflation. On that basis, if the target had been set at nil, we should no doubt now have a £10½ billion level of reflation. The argument is so astonishing that I can only assume that it was put in by the right hon. and learned Gentleman himself.
I hope that all hon. Members at least agree that, if sterling M3 is an inadeqate measure, so is the PSBR. For example, reducing the PSBR by £400 million by a windfall tax on banks—which I happen to agree with—and by £1,020 million by additional tax on North Sea oil does not have nearly the same economic effect as taking the amount out in income tax or through indirect taxes.
I hope, too, that the House recognises the substantial margin of error in forecasting the PSBR. In the Chancellor's estimate, the margin of error in 1980–81 will be £5 billion. I do not criticise the Chancellor for that. It is not unusual to be out by 2 to 2½ per cent. when dealing with income and expenditure flows of £200 billion. If companies in many industries had only that margin of error they would be highly delighted. At page 28 of the Red Book we are told that the average annual error in the PSBR since 1973 has been 2 per cent. of GDP. On that basis, in 1981–82 the margin of error will be £4½ billion. Given such uncertainties and the different economic consequences that go to make up the PSBR, we should recognise that it is absurd for the Chancellor to tie himself to a rigid PSBR. Fortunately, he did not. He simply made himself foolish in appearing to attempt to do so.
However, whatever the economic categories of what goes into the make-up of PSBR, it has to be financed. How much should it be? In the light of past errors, the honest


answer would be "I do not know", but I shall not answer the question in that way. If my proposals were accepted, it is possible—and I put it no higher than that—that the PSBR would be higher than the Chancellor has planned. However, as I said, it could be £4½ billion higher on his own estimate. It is also possible that, if we increase spending in the next year in certain ways, we may not only not increase the PSBR but reduce it. That illustrates the other fallacy of the argument of the right hon. Member for Down, South.
I shall not go into all the tax measures, many of which are grossly unfair. In the Sunday Express yesterday the Chancellor stated:
but the increases I had to announce last Tuesday were inescapable and as fair as I could make them.
That is blatantly untrue. There is a case for increasing income tax in the Budget, but the Chancellor should have retained the Rooker-Wise-Lawson increase in the threshold and increased the basic and higher rates of tax. There can be no dispute about it; that would have been more fair. The Chancellor owes the House an apology for what he wrote yesterday.
Without a basic degree of fairness in our tax and social system, no Government will ever be able to achieve the necessary steps to get the economy moving. The Chancellor stated that the Budget was producing a balance in favour of industry. He hit private consumers and individuals, but he has not balanced that with help for industry. The stock relief scheme and the removal of clawback was sensible, but it only recognised the obvious. Many companies would not have been able to pay the corporation tax, anyway.
I cannot comprehend how 100 Conservative Members could be so congratulatory in an early-day motion about the other two schemes. Last week on television a banker stated that the cost for borrowing under the loan guarantee scheme by small firms will be 6 or 7 per cent. above the base rate to allow for the premium for the guarantee. Under this great boon we are talking about an interest rate of 18 to 19 per cent. The banks will still have to provide 20 per cent. risk. I regret to say that, knowing our banks, they are likely to be as cautious as ever. I fear that the scheme will bring no more than marginal relief.

Mr. Richard Page: Does not the right hon. Gentleman accept that loan guarantee schemes operate in practically every other industrialised country? The calculations are 3 per cent. above the base rate for the premium and not the mythical 6 per cent. with which he is trying to denigrate the scheme.

Mr. Barnett: A leading banker last week stated in public that the figure would be 6 to 7 per cent. above the base rate. We have not yet had a figure from the Chancellor. Perhaps he will give us one tonight. However, even if the interest rate is 15 per cent., the relief will be only marginal—although welcome, nevertheless.
Under the business start-up scheme there will be tax relief on up to £10,000 if the money is invested for five years in a minority stake in a new company. I do not know what sort of people Conservative Members think invest in small companies. They seem to imagine that people will say to themselves "I shall risk £10,000 for five years. It doesn't matter whether I lose it. I don't mind having no say in how the money will be used. I shall get tax relief on it. I may lose only £4,000 or £5,000." It has been said that Conservative Members do not know much about small

businesses. The early-day motion confirms that. The Chancellor says that the scheme is unique to this country. I am not surprised. No other country would be so absurd as to introduce it. Both schemes are little more than gimmicks, as we had last year with enterprise zones—and we have not yet even started that gimmick.
I share the Chancellor's wish that any stimulus to the economy should be through industry. It should not be inflationary—although, as with his VAT blunder in 1979, he has provided his own stimulus for inflation in the Budget. In the absence of an incomes policy, which the right hon. Member for Down, South derided without giving any evidence as to why he should do so, there would be a problem with any stimulus. But, as many have said, provision could be made. The right hon. Member for Taunton (Mr. du Cann) from time to time makes speeches disagreeing with the Government, although he rarely does so on the air, when he prefers to make the kind of speech with which the Prime Minister can say that she agrees. The right hon. Gentleman agrees that there should he some stimulus to the economy through increased expenditure and investment in the public sector and, I would say, in housing particularly. Not only would this he non-inflationary, but it would give greater help to the private sector than to the public sector because that is where most of the work is done.
In practice, however, because of the delay in putting this stimulus into the economy in the public sector, the effect upon the borrowing requirement in 1981–82 would be small, because it could not be started up that quickly. Nevertheless, there would be a substantial boost to the public sector and to the private sector in terms of jobs. Far more importantly, the public sector would be ready to cope with the upturn and to provide the essential services for the private sector when the upturn comes.
The trouble is that the Government have, as it were, fallen for their own rhetoric about public expenditure. I am prepared to concede that in my own period as Chief Secretary I was as responsible as any for being willing to accept a total cut in public expenditure without being too concerned about whether it cut capital rather than current expenditure. But it has now gone much too far. In fairness to the Chief Secretary, however, when he asks a spending Minister to make cuts in his departmental budget, and the Minister says that he would rather make them in capital than in current expenditure, it is not easy for him to insist that it must be in current expenditure.
That being said, however, the Government have not been very successful in making a reduction even to the overall level of public expenditure. As a percentage of gross domestic product, it was 41½ per cent. in 1978–79 and 44½ per cent. in 1980–81. We are told that it will fall by about 1 per cent. in 1981–82. It is just possible that it will, although I think it extremely unlikely as it is dependent upon all sorts of things. In the short term, it is dependent upon the relative price effect—which everyone understands, of course—which means that pay in the public sector will be lower than in the private sector. In my experience, however, in many parts of the private sector there are no pay increases at all. Certainly, that applies in many parts of the textile industry.
In the long term, even by 1983–84, the last year in this Budget, total planned public expenditure will be almost £2 billion more than in 1977–78. I am not complaining, of course, but certainly the Government are doing a very strange job in cutting public expenditure. If one includes


net debt interest, the level of public expenditure in 1978–79 was about the same as the level now planned for 1983–84. But distribution will be far worse in that a much greater proportion will go into unemployment and social security benefits rather than into the services wich has been so denuded in the past couple of years.
One of the problems with public expenditure is that the present definition of what is or is not public expenditure is wholly unsatisfactory. When I changed the definition for nationalised industries from one which counted all investment as public expenditure, no matter how it was financed, to one related to borrowing, I thought that that would help. I have to say that it did not. The Chief Secretary last Wednesday—unfortunately I was in Committee at the time, but I have read the report of what he said—stated that
Whether or not such borrowing were to be classified within the PSBR is a side issue".
I am not at all sure that it is a side issue. Of course, wherever it is, it has to be financed and controlled. Nevertheless, the present definition, in which borrowing is counted as public expenditure, together with the fact that politically this is easier to cut than much of current expenditure, has undoubtedly helped to ensure continuing cuts in capital rather than current expenditure.
My fear is, therefore, that if the Financial Secretary, no doubt with the assistance of the Chief Secretary, is planning to cut public expenditure further this summer because of the vicious circle into which the Government have got the economy, the cuts will come from current expenditure. Moreover, they will come from yet more cuts in social security benefits because that is the only way that the Government can get out of the vicious circle into which they have brought the economy.
The Chief Secretary also said on Wednesday that if there were more borrowing by nationalised industries
there would be crowding out of private investment".—[Official Report, 11 March 1981; Vol. 1000, c. 922.]
Again, I am not sure who wrote that. While I accept that at certain times, in certain economic circumstances, that may be the case, it is absurd for anyone to argue at this time that if one found more money for the nationalised industries' capital investment programmes private investment would be crowded out. It is so nonsensical that I should not have expected anyone to say it. Nevertheless, the Government have said it, and no doubt they will have to find excuses when—as I hope that they will—they heed the requests of Conservative Members and find some money for new capital investment in the nationalised industries.

Mr. Nick Budgen: Does the right hon. Gentleman agree that "crowding out" merely means that competing forms of investment have to pay a higher rate of interest? It does not totally prevent other investment.

Mr. Barnett: It is nice of the hon. Gentleman, as it were, to explain the Chief Secretary's view on these matters. The Chief Secretary simply said that it would crowd it out. I am glad that the hon. Gentleman agrees with me that that is not true. It is certainly not true today, as I gather he accepts. He is merely saying that it might cost more in interest rates. I shall come to interest rates in a moment. The basic argument is about finding more

money, as I am sure that the Government will have to find more money, for capital investment in the nationalised industries.
As I said at the outset, I do not pretend that one can ignore the PSBR. But the way in which it is now managed has elevated what was always a complex and not easily predictable figure to a highly simplistic principle. I am bound to say that the Labour Government also elevated it too much, but the Chancellor has now taken it to such absurd lengths as to do real and lasting damage to the economy.
I return to the straight question. What should the PSBR be? I have referred to the margin of error of £4½ billion. The Chancellor's forecast for 1981–82 is therefore from £6 billion to £15 billion, within that margin of error. If he accepts the advice of the CBI and others, including the right hon. Member for Chelmsford and the right hon. Member for Taunton, it may be higher. But I have shown that spending more money on investment in the nationalised industries would not necessarily add to the PSBR. I have on many occasions accepted the need to finance it. Nevertheless, it is absurd that we should crucify ourselves with very high interest rates in order to finance a perfectly reasonable PSBR. The Chancellor forecasts that it will be 4½ per cent. of GDP. A figure of 6 per cent. or 6½ per cent. of GDP would not be an unreasonable level of PSBR to finance without excessively high interest rates.
If the Government and their supporters, and there are not many of them left now, apart from the Financial Secretary, were not obsessed with a whole theory of money supply and did not keep interest rates as high as they were last year in order to finance a perfectly reasonable borrowing requirement of 6 per cent. or 6½ per cent. of GDP, this might well—and I hope that it would—have the effect of bringing down the exchange rate. That would be an additional bonus.

Mr. Maurice Macmillan: As many people have stated, the outlook is very gloomy, but I do not think that it is the Budget which has made it gloomy. The Budget at least tried to deal with the situation as it is. However, I must admit that the Chancellor of the Exchequer and his policies have not exactly shed a
kindly Light, amid the encircling gloom".
We all know how strait the jacket is that binds him, however that jacket may first have been woven. The sort of solutions put forward by the CBI and the TUC, seeking to burst out of the jacket, would only lead to the sort of disasters which we have experienced before when such solutions have been applied. It just is not true to say that what is good for the big battalions, whether of labour or capital, is good for Britain. Nor do I think that, given the situation today with high inflation, it is in the least relevant to suggest the sort of policies which were perfectly reasonable and sensible 50 years ago when the recession was accompanied by falling rather than rising prices.
Having said that, and so giving some support to the Chancellor's Budget, I must also say that I am not at all confident that he can achieve his medium-term strategy by means of Budget measures alone. Nor do I believe that these will take us any further than his medium-term strategy and begin to undo the errors of the past, which is one of the ambitions with which this Government came to office.
I think that we shall find that the Chancellor will need other measures, both administrative and perhaps legislative. As the right hon. Member for Heywood and Royton (Mr. Barnett) has pointed out, the Chancellor's arithmetic is too uncertain to restore confidence by itself. If we are to maintain confidence throughout the period of short-term unemployment which the right hon. Member for Down, South (Mr. Powell) pointed out was a necessary accompaniment to trying to cope with our inflationary problems, we shall need to see a little further beyond the immediate confines of this Budget. Therefore, I should like to see some recognition from the Treasury Bench that inflation is a symptom of our disease and not the disease itself. Surely the real disease is the gap between people's expectations and their willingness to supply.
We see that most of all in the public sector, which is where the main problem facing the Chancellor lies. After all, price rises in most of private industry have fallen from 20 per cent. to about 7 per cent.; strikes are vanishing; restrictive practices are disappearing; overmanning has gone and there is even a considerable improvement of management.
I am not saying that this happy situation will continue once unemployment starts falling. If there were time, I should like to say something about future difficulties for the Chancellor in the private sector as the economy starts growing and firms start expanding. Nevertheless, that is for the more distant future, because as the Chancellor has admitted, the present levels of unemployment will not fall substantially for some while.
Taken together with the enormous balance of payments surplus, we have a private sector situation which in more normal times would have enabled the Chancellor to have had a very different Budget from the one that he has presented. It requires only a short period of reflection to see that, had the public sector and nationalised industries—where inflation is now running at about three times the rate in private industry—behaved in the way that the private sector has, the Chancellor could indeed have acted differently.
We all know the reasons for the Chancellor's public sector problems. What worries me is whether the Chancellor will be able to cut out waste and eliminate unnecessary manpower and succeed in preventing an unnecessarily high escalation of salaries and wages. Will either he or his colleagues be able to ensure that savings are made on current account rather than on capital account?
The right hon. Member for Heywood and Royton is also a former Chief Secretary, and perhaps it is easier being an ex-Chief Secretary than it is doing the job. Perhaps the new systems of control, not available to either of us, will help, but I very much doubt whether they can be fully effective.
I should like to take up some of the remarks that have been made about the PSBR. My first suggestion is that the Chancellor should consider setting that target in terms of constant unemployment, as is done in other countries. At the same time, he should identify the purpose for which public expenditure is being made. He should make a clear distinction between spending on current account and spending on capital account. I do not know why that has not been done before. I remember making a speech about it 20 years ago, but through successive Governments, the Treasury has triumphed over the common sense of its Ministers; and, therefore, we have not had that distinction.
There should also be a clear distinction between capital expenditure which either earns money or should earn money, together with capital expenditure which saves money, and the type of capital expenditure which may be necessary but which poses totally different problems, because by making it the Government undertake to go in for further current spending. The most obvious examples can be seen in the social services sector, including such things as hospitals.
By and large, although it must all be financed, I see no reason why a great deal of the Government's investment should not be classified in the same way. For example, why should investment in British Telecom, which it could well raise independently from the market were it a private company, prevent the Chancellor from doing other things at the same time, because it is now classified as public expenditure? In making this new allocation of public spending, the Chancellor would do well to isolate that element in investment which is subsidy rather than true investment.
If in the nationalised industries my right hon. and learned Friend could identify the costs of keeping them going—I am not saying that he is wrong to keep them going—including wage costs, perhaps it would be a little easier for the country to see the contrast between the capital spending required to keep them going and the cost on current account of paying unemployment benefit and losing taxes as a result of shutting them down.
I do not suggest that there should be a prices and incomes policy, still less anything approaching a "solemn and binding" one, as referred to by the right hon. Member for Down, South. But perhaps it would be a little easier to explain to wage earners just how much their own wages are reducing the social wage of which they are equal beneficiaries. It is easy to believe that it is always the other man's wages that puts up costs and not one's own.
I accept that these are all palliatives, and I have a grave doubt whether, without other measures of a far more wide-reaching nature, it is possible for the Government to contend successfully with the huge weight of monopoly, both of capital and labour, within the Government service itself and within nationalised industries.
Successive Governments have given every sign of finding that without various measures such as incomes policies, which have failed, they cannot cope. I should like to see the Chancellor recognise the need to get rid of what I believe Lord Beeching once called "hidden cross-subsidisation". I should like him to find methods of reducing the burden on the taxpayers of investment in the nationalised industries by trying to go back more to the market.
With great respect to my right hon. Friends, they seem to me to have dodged entirely the benefits of "privatisation" as well as the difficulties. I will give one example, and here I must declare an interest because I am a director of a company which once built warships. If shipbuilding had been returned to the private sector, it might have been necessary to subsidise some yards, but not to provide capital for all. Could not the Government have explained that it is an illusion to hide a subsidy behind the profits of another company? A subsidy is a subsidy is a subsidy, however it is financed, and the burden on the taxpayer and the damage to the work people is the same, whether it comes out of the profits of one part of the enterprise or whether it comes directly out of taxation and borrowing.
I should like the Chancellor to consider the extension—he has made a small beginning—of the process of turning back nationalised industries into Companies Act companies.
These are all things that the Government were elected to do. They were part of the original programme. They were part of a programme that was conceived not out of prejudice or for political or ideological reasons but because the Government knew that they could not benefit the great mass of the people by bringing down the rate of inflation, by creating steady prices and by reducing taxation, unless some of the burdens which are now constraining us all so much were removed in the ways which I have briefly suggested, and which were set out in more detail in our manifesto.
I hope that the Chancellor will be able to give some indication that he sees the need for this kind of policy, because without it I do not believe that we can look for any further relief for the corporate sector without clobbering still further the consumer through indirect taxation and the worker through direct taxation. I do not believe that it will be possible not to put up taxation further—if the Chancellor is to relieve the corporate sector to the extent that he hopes—unless he can grasp this generalised public sector nettle a little more boldly.
We know that everything depends on the corporate sector. The Chancellor has helped especially the smaller and the growing companies and unquoted companies. Lower interest rates, indeed, help everybody. I hope that he will continue to lower the interest rates. He could go beyond that and do one or two other things, despite the constraints that are on him.
I am usually very sceptical about investment incentives, because I believe that investment follows growth, rather than the other way round. It is investors—not institutions—who need subsidies. That has been recognised by the Chancellor in the aid that he is giving to industry. But our present circumstances are not normal. The corporate sector has borne the main burden and now needs a certain amount of relief.
As hon. Members in all parts of the House have suggested, it is possible, without burdening the public sector borrowing requirement unduly, or upsetting the money supply, to do a little public capital spending. After all, Government's fixed investment is due to fall by 23 per cent. this year, so there is a little room here for capital spending in the public sector. It would bring work and opportunity to the private sector.
I should like the Chancellor to consider the whole question of defence spending, because this, too, can be a help and a stimulant, like other parts of public investment, particularly to our engineering industry.
We all know that there is a massive spare capacity in the construction industry and in the capital goods industries. Would it not be possible so to gear the allowances and investment help that the Chancellor is proposing to give that they will be an encouragement for those industries to bring forward their investment a little, rather than wait for it to happen in three or four years' time?
It is perfectly feasible to give quicker, more effective and cheaper help to industry than we now have under the Industry Act 1972. The constraints and criteria of section 8 of that Act are very narrowly drawn. The narrowness

with which they are drawn is inhibiting small-scale help to individual companies, where not very much money is needed to do a great deal of good. The EEC criteria which are required to be met to get help from the Community are in themselves quite tight enough to enable a little flexibility to appear in our own criteria.
I should like to ask the Chancellor one question. Why is there no computer model of a firm or an industry? We have economic models of the whole economy, but I am told that there is no basic model of the firm which could be programmed to represent different sizes and different types of company, and on which the Chancellor could test the microeconomic effects of his measures.
We hear a great deal in all Budget debates about demand management and about the microeconomic effects, but I am amazed at how amateur and how ineffective is the technique that is brought to bear on the likely effect of the Chancellor's changes on individual companies and types of company.
It is essential for the Chancellor to continue to bring down interest rates, and he can do that without in any way making the control of the money supply harder or making the funding of Government debt more difficult. After all, in the Budget he has a lot of new inducements for people and institutions to lend to the Government rather than to put their money into industrial regeneration. The other side of that coin should be the continual lowering of interest rates.
With regard to the control of the money supply, the Chancellor faces far greater difficulties because of the constraints of having a very strong oil-backed currency and because of the wildly fluctuating exchange rates throughout the world.
I agree with the Chancellor's new measures to protect us against a certain amount of currency speculation. They help, but they are a very tentative step in this direction. I urge the Chancellor, in considering future investment in industry and its impact on the money supply—and in considering all the constraints on him, to think what would happen if we could get a greater degree of stability in exchange rates. I ask him to consider much more carefully—perhaps he could give us some sort of timetable—an approach to our European partners about joining the EMS.
I should regard that move as only a first step, because it will be very hard in the industrial world to get the money supplies of the different countries under control and to get a degree of stability into the exchange rates without having a world-wide—or at least an OECD-based—standard, preferably a standard based on real goods rather than on money.
I have tried to give a few ideas on improving the tools that the Chancellor has at his disposal, and a few suggestions for more radical and basic changes which I believe can begin to undo the chains which seem to have bound all Chancellors for the last few years. I have done this in the hope that when my right hon. and learned Friend replies to the debate he will tell us what he sees and preferably—if he can—why he sees it. The words of the hymn with which I started my speech say:
I do not ask to see
The distant scene; one step enough for me.
Perhaps we cannot expect to see the distant scene, but for the Chancellor's Budget to be fully credible we need to see more than just this one step.

Mr. Richard Wainwright: It is generally agreed that one of the main purposes of prolonging our Budget debate over four days is to enable the public to inform themselves about the economy and about what the Government propose to do to it.
Back Benchers on both sides of the House have risen splendidly to the occasion and contributed greatly to the stock of public knowledge. The most strikingly significant contribution was made by the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler), whose independence I salute. I wish him well in his membership of another group within the House. Another striking speech was made by the right hon. Member for Chelmsford (Mr. St. John-Stevas). The silence in which it was received showed that hon. Members were interested in it.
There was a notable difference between the line taken by the right hon. Member for Stockton (Mr. Rodgers) and that taken by the right hon. Member for Stepney and Poplar (Mr. Shore). I was also struck by the correspondence between the remarks of the former Chief Secretary, the right hon. Member for Heywood and Royton (Mr. Barnett), and those of the right hon. Member for Stockton. But the speeches from the Front Benches, particularly those of Ministers—who have overall responsibility for the Budget—have been deplorable. They must have left the public, particularly the business sector, not only stunned but bemused.
The only attempt at a trumpet note during the Budget Statement was when the Chancellor of the Exchequer spoke about the imbalance between the treatment of business and that of the consuming public, who, he said, had had a good deal during the past two years. He also spoke about the imbalance between the public and private sectors. The attempted trumpet call came when the right hon. and learned Gentleman said:
Moving towards a better balance must be the central purpose of this Budget."—[Official Report, 10 March 1981; Vol. 1000, c. 760.]
The hopes excited by that sentence were not fulfilled by any part of the Chancellor's speech. I am told that those who watched the reactions of business representatives as the speech was relayed in television studios were struck by their honor as the speech gradually wound to an end without giving any real cash assistance to established business.
We Liberals believe that even the stock relief scheme—which represents the only real help from public funds to established businesses—should be considered with great caution by those businesses which think that they might get a great deal out of it. The Government's perverse refusal to pay homage to established principles of current cost accounting and their insistence on applying to all businesses—no matter what their stock in trade or work in progress—a single all-stocks index may turn the whole thing into a mouse. No doubt the all-stocks index was chosen because it is falling with conspicuous speed. Some say that in a month or two it will be down to a rate of inflation of 4 per cent. That will not correspond to the realities experienced by many businesses. However, that is a matter for the Finance Bill.
My impression—which has been fortified by other speakers—is that the right hon. Member for Worthing (Mr. Higgins) struck the right note when he said that

business men who had heard the Budget Statement and the Government's statements would get the following impression:
the medium-term financial strategy means that there will be deflation for the indefinite future and therefore no point in investing".—[Official Report, 12 March 1981; Vol. 1000, c. 1044.]
That sums up the situation. It is a miserable message for business.
Some hon. Members will have found that another attitude is being expressed by interested and concerned members of the public. There is amazement that the Government should stand idly by while many of our key physical assets fall into decay. The Government refuse to harness the abilities of the unemployed, or unemployed resources, to the maintenance of our physical stock. The Government go on and on about it being their sacred duty to maintain the value of the currency. That is all very well, but is it not also the Government's prime duty to maintain the efficiency and standards of the public sector's physical assets?
Not far from my constituency—in places such as Manchester, Blackburn and Bolton—the sewers are falling apart. There are great holes in some of the main thoroughfares and new holes are a weekly occurrence. When people see them, they say "For heaven's sake, why can't the Government take people out of the dole queues and give them honourable and properly paid work maintaining our basic infrastructure?" However, the Government have made no reference to that urgent need, of which sewers are just one example.
In addition, the Government refuse to understand that, by coming to the rescue of our capital stock and spending money on new capital ventures, unemployment could be gradually relieved—rather too gradually for my taste—without any serious risk of halting the reduction in the rate of inflation.
On the second day of the Budget debate, my right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) made it clear that some Liberal proposals to that end were fed into the Treasury model—through the facilities that are known to exist in the Library—well before Budget day. They were compared with the Treasury's expectations from feeding its policies through the model. It is no good the Financial Secretary heaping cheap derision on that. He knows that the Treasury relies on the model and spends hundreds of thousands of pounds trying to keep it up to date.
On our modest proposals for capital expenditure and for getting rid of the tax on jobs—the national insurance surcharge—the model showed a reduction in unemployment, compared with the estimate given for Treasury policies, of 300,000 by the end of 1982, rising to a reduction of 400,000 by the end of 1983. For 1982, the estimated increase in the rate of inflation was only 0·1 per cent. For 1983 it was 1·2 per cent. Therefore, there could be an increase in employment in exchange for a relatively modest slow down in the fall of the rate of inflation. As many hon. Members will have expected, the real pay-off comes in the fourth year of such a programme. The public sector borrowing requirement then begins to reflect the result of much greater economic activity. Taxes begin to flow in and the economy can begin to come to the rescue of the debilitated Exchequer. One can then get the public sector borrowing requirement fully in accord with reason and almost within the Government's obsessions.
A group of modest measures was used, which sought to abolish the national insurance surcharge, the heavy fuel oil tax—a relic of an obeisance to the miners that even Mr. Scargill no longer demands—and which allowed full indexation according to the Rooker-Wise amendment and the injection of only £2 billion into increased public investment, home insulation and so on. We have not heard why the Government obstinately refuse to pay such attention to the benefit which can flow from enhanced capital programmes.
The third and last public attitude I wish to mention is the great question mark placed by the business community over how and when the promised recovery can occur and, if and when it occurs, how the customary upsurge in the inflation rate can be avoided.
I beg the Chancellor of the Exchequer to tell us why he persists in saying that we are on the eve of the end of the recession and that, when it ends, things will come right on the production and output front without going back to a rising rate of inflation. That has not been made clear to the business community or to the House.
My impression is that the Treasury is obsessed with the possibilities of everything coming right through the end of destocking. I ask the Treasury to consider what a fickle measurement stocks can be. With the rapid adoption of the computer throughout the whole range of business—not just the giant concerns—there will be a massive permanent improvement in inventory control. That will make overstocking very much a thing of the past in the majority of businesses. The Treasury has failed to understand the great sea change in stocking policies, even down to relatively small businesses. It is foolish to expect that we shall get out of the recession by a massive upsurge in stocking. There is little real evidence of that taking place.
The trouble about the Budget and the reason why the public are left without any coherent explanation of where it will take us is that the rest of the Cabinet have allowed themselves to be hijacked by the Prime Minister and the Chancellor of the Exchequer in respect not only of the few aspects of the Budget which ought still to have a veil of secrecy but of the Government's whole economic strategy. Despite my respect for some of the wets in the Cabinet, I do not understand how they can continue honourably to gather round the Cabinet table and allow just two of their number to lead the nation on a reckless adventure based on a monetarist obsession.
We are told that the great crunch is to come later in the year, when the wets in the Cabinet will be put on the spot: if they want to preserve their spending programmes, they will have to kiss the rod and accept even higher taxation in the next Budget. If the wets are so foolish as to allow themselves to be boxed in in that way, they will be objects of derision throughout the English-speaking world. Surely, some of them can see that they must get rid of their monetarist obsession if they are to get free of the box that the Prime Minister is preparing for them.
The Daily Telegraph, of all papers, for once seems to be the fountain of truth today. That considerable authority, Keith Middlemas, in an article on one of the middle pages, said:
At present, where industry as a whole is concerned, policy-making looks uncommonly like Neville Chamberlain's strategy before 1940: with declared aims only partly in line with real national interests, and implementation dogged by incoherence, lack of public or institutional support, and masked by a

headstrong direction which allows no place for the admission of mistakes. War-time analogies are rarely appropriate, but industry is now threatened more than in the 60 years since 1921, and it is worth recalling just how dramatic a remedy was eventually required in May 1940.
I hope that rational members of the Cabinet will heed the example set by the hon. Member for Norfolk, North-West and will not allow themselves to be made mock of by a headstrong Prime Minister.

Mr. Raymond Whitney: I suggest that the next time the hon. Member for Colne Valley (Mr. Wainwright) goes into the Library with his right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel), instead of looking at the unreal world of the Treasury computer, he should spend more time studying the real world as we have known it in the past 20 years and take account of the inflationary effect of the proposals that he was putting forward. For example, the elimination of the national insurance surcharge would involve £4 billion, apart from the other huge sums to which he referred.
I believe that on balance my right hon. and learned Friend the Chancellor of the Exchequer deserves congratulations on what clearly is a very tough but courageous Budget.
The hon. Member for Blackburn (Mr. Straw), winding up for the Opposition on Thursday, quoted from St. Luke about the sinner who repenteth. There is a certain element of truth in that, but, obviously, I believe, from a different side of the argument. There has been a certain amount of sinning by the Government in moving away from the original aims on which they were elected in May 1979. Therefore, I welcome them back into the fold, represented by this Budget.
The attacks on the Budget to which we have listened—for example, by the hon. Member for Colne Valley—have misrepresented it in an incredibly effective campaign as the product of a madly crazed fixed monetarist group of maniacs, if that is not too strong a description—[HON. MEMBERS: "Hear, hear."'] Indeed it is not. But let us consider the facts. I know how painful that will be for those who say "Hear, hear". I agree with the finding of the Treasury and Civil Service Select Committee, chaired by my right hon. Friend the Member for Taunton (Mr. du Cann), that the monetarist experiment has not been tried.
The chosen regulator—sterling M3—however much we allow for the corset, is running at more than twice the target figure. Therefore, no one could condemn, accuse or congratulate my right hon. and learned Friend for fixedly and uniquely pursuing monetarism. Last year the Government spent £77 billion, this year they are to spend £94 billion and next year, if we are lucky, we shall not get away with spending less than £104 billion. Therefore, one could hardly accuse my right hon. Friends of being madly in favour of cutting in their approach to public expenditure.
I believe that they should be congratulated on not falling into the all too tempting trap that Governments of both complexions during the past 20 years have fallen in so often—namely, going through a period of sacrifice, losing their nerve, reflating excessively and then getting back into the vicious circle from which we have been trying to escape for so long.
I congratulate my right hon. and learned Friend on three particular areas. First, the move to the indexing of public


debt, the gilts, is imaginative and greatly to be welcomed. I recognise that in the City and in the halls of the Bank of England this has caused angst and pain. Funding at 17 or 16 per cent. long into the future would impose a very heavy burden. It also betokens a clear determination to reduce inflation. This is a mark of confidence in the success of the Government's policies. If we ensure that it is a low coupon, the challenge to industrial investment will not be nearly as great as is feared by some sectors in the City.
Secondly, I congratulate my right hon. and learned Friend on the decision to move to—indeed, to move back to—real money and away from funny money. We are dealing, in a sophisticated world, with sophisticated people who have learnt to manipulate volume. Whether one is a bureaucrat, the chairman of a nationalised industry, the chairman of a water board, or whatever, if one is allowed to talk about volume, one can get away with murder. It is about time that they were brought back to the realities—that money means taxes and jobs, and that we cannot excape from that. We must certainly bring people back to that.
Thirdly, I congratulate my right hon. and learned Friend on the measures which have been achieved for industry. I believe that their effects have been greatly underestimated. I hope very much that the CBI, having got its publicity campaign out of its system, will now have a much more serious look at them. I believe that for the CBI to produce the document that it did, five days before the Budget, was scarcely serious in terms of policy management of our economy, in which it must play such an important part. At that stage, it could have been nothing more than a publicity gesture. I hope that the CBI is not simply in the market for making publicity gestures, which, by definition at that stage, must have been ineffective and, therefore, empty.
I hope that the CBI will analyse very carefully the very great importance of the measures which have been offered and which were outlined today by my right hon. Friend the Secretary of State for Employment. I hope that it will emphasise the positive and make sure that British industry understands what it has been given and, praise God, how much more it will be given when it can sensibly be given it without running the risk of over-inflating the economy too early.
I offer three areas in which I believe that the Government must try a little harder. In the area of Government spending, it is alarming to consider that in the second year of the present Conservative Government, out of every £100 spent in Britain, very nearly £45 is spent by the Government—that 44½ per cent. of the gross domestic product is from the public sector. Is is appalling that we know that all of the tax revenue that we shall gain this next year from the petrol duties, with all the problems and worries that that will cause tonight and later in the year, amounts to what we gave to British Steel last year.
The examples of this are numerous, and I shall not go on, but we must understand the damage that this causes. We must also understand the very deep resentment among workers in the manufacturing sector, the private sector of industry, about what they see as the pampered treatment handed out to public sector employees, to those in the comfortable embrace of the taxpayer. If we do not understand that, we shall make a very important political mistake. We shall also make an important political mistake if we do not recognise the feeling in the country

about public sector pay. Understanding that it increased by 25 per cent. last year, people in private industry look at those who enjoy job security and index-linked pensions and whom have been offered a 7 per cent. pay increase. They cannot understand any suggestion that those conditions, in our present economic fortunes, are not acceptable.
Here is an area in which we need strong nerves and an imaginative approach. As regards the nationalised industries, I hope very much that my right hon. and hon. Friends will continue to press very hard and look at every possible option to bring back commercial reality and to privatise—a horrible word from which, it seems, one cannot escape—the public sector. This was brought home to me very forcefully, a few days ago when the chairman of the Water Council was under some moderate pressure on Radio 4 about his settlement at 13 per cent. It was then only 12·3 per cent., but he defended it by saying "We have a strong economic position because we are a monopoly." He was right. But what a depressing way to defend it.
I believe that a second area in which the Government should make faster progress is in the techniques of monetary control. We have been looking at this matter for too long. The Government came in and said that one, but only one, of their targets was to control the expansion of domestic credit. As the dialogue seems to have gone, the experts in those matters, the mandarins at the Treasury, the Governor of the Bank of England and his court, advised by the City, said "All right, if you want to do it, the mechanism for doing it is by setting interest rates." Of course, the result shows that this has simply not worked. The much-vaunted financial sophistication of London has defeated it, because with reserve asset ratios, the discount houses, and all the rest of the panoply, it has been shown that simply setting a price of credit did not stop the creation of credit. Therefore, we must find another route to it.
We had a Green Paper in, I think, last March, and the Chancellor made another step forward last November. We had another step forward in the Budget last week but it is very slow progress. If we believe that one element of a sound policy is the control of money, we surely must make better progress and understand that this is the kernel of it.
Lastly, I believe that there is a great need for improved mechanisms to impose the collective will—I assume that there is a collective will—of the Cabinet to achieve the ambitions on which we were elected. It is clear that if there is that collective will, it has not been implemented. I believe that part of this is because the old system of the Treasury control of Whitehall was dissipated and chipped away, and nothing has been firmly put in its place. I believe that there are proposals on offer where the Cabinet Office machinery should be strengthened, and it must be strengthened. It is not for me at this stage to go into that matter in any more detail, but much more cohesion is needed at the centre in Whitehall to implement what the British Government demand.
In conclusion, I believe that mistakes have been made but that the original strategy for which the people of this country voted was right. I am delighted that this Budget represents a recognition that the return to that strategy must take place. As we return to that strategy, we must not forget one other important element. We shall not get the British economy and British industry right until we take one more look at our industrial relations legislation. If we


get all the other things right and omit that, we shall still fail. We cannot fail, because, as has been shown from the speeches of Opposition Members, there is no alternative.

Mr. John Horam: I hope that the hon. Member for Wycombe (Mr. Whitney) will forgive me if I do not refer to his speech, excellent though it was in part. I should like to refer briefly to the action that my hon. Friend the Member for Norfolk, North-West (Mr. Brocklebank-Fowler) has taken today. It so happens that by a coincidence—I am sure that it is a coincidence, because I do not think there is some sort of 11-year itch in politics—my hon. Friend and I came into the House in 1970 on the same day. It is obvious that, while we have been on opposite sides during those 11 years, we have been describing equal but opposite parabola towards the same conclusion. I believe that it is a conclusion to which millions of British people are also coming. We shall see the proof of that as the years of this Parliament unfold.

Mr. Robin F. Cook: Indeed we shall.

Mr. Horam: Indeed we shall.
I think that we should also commend my hon. Friend the Member for Norfolk, North-West not only for his forthrightness in stating his views but on his unique courage, because I believe that it is a unique event in the post-war history of Parliament. Since 1970, when my hon. Friend and I came into the House, we have seen many Budgets, from both sides, but none has struck me with the horror with which this Budget has struck me.
It is horrific to contemplate the unemployment, the poverty, the hardship and the blighted hopes which the Budget will bring about. In my view, it is also appalling to see the genuine dogma-laden sterility of the view which the Prime Minister and the Chancellor of the Exchequer have taken. I refer to the Prime Minister and the Chancellor of the Exchequer deliberately, because it is they especially, against the wishes of many of their colleagues, private and public, as is obvious from press and other comment, who have forced through this policy.
It behoves the Conservative Party to reflect on the extent to which it has given power to two of its number to get their way on this issue over the wishes of so many in the Conservative ranks. It is also a matter of fact that we as parliamentarians should reflect on the extent to which we have given power to two people in our parliamentary system. As one who has long supported proportional representation, may I say that the events of the past few weeks have reinforced the overwhelming case for some sort of PR system to be introduced into our democratic politics. It would remove the chance of the sort of extremism that we have seen from both sides in politics in recent years and would make it necessary for politicians to argue their case and achieve a consensus before reaching such decisions as we have seen in this Budget.
The Budget is grotesquely perverse, bearing in mind the circumstances in which we find ourselves. So what should have been done? In essence, two things should have been done, and I propose to say a few words about each of them. First, rather than the deflationary approach which the Chancellor of the Exchequer has pursued—and it is deflationary, despite what the Financial Secretary has said

on television and elsewhere—the time was ripe for a controlled expansion. Secondly, the right hon. and learned Gentleman should have side-stepped the increasingly lost and bewildered Secretary of State for Industry and established a small committee briefed to produce coherent industrial strategy.
On balance, I believe that it is necessary to have an expansionary approach. Clearly we are in the worst depression that we have experienced since the 1930s. We need not be in that depression. The Government have brought about the depression. They have done it because they say it is the way to reduce inflation. However, that is the equivalent of saying that the only way to fight a war is by the methods of Passchendaele and the Somme. However, it has never been necessary to use such blunt and antique instruments, and it is not necessary today. But we are in the mire and we must get out of it.
The monetarists say that we shall get out of it automatically. It is worth commenting on how weak the intellectual defence of the once so triumphant and strong policy of monetarism has become. All that case revolves around one set of circumstances. It is a matter of historical fact—I defy anyone to take the contrary view—that we have got out of a recession automatically without the Government stimulating demand on only one occasion. That was immediately after the boom which followed the First World War. The period 1921–22 is the only occasion on record when an economy has come out of recession of its own accord without the Government providing any stimulus. It is remarkable that monetarists are now disinterring the economic history of that far distant period to prove that they are right today. That shows how weak and slim their case has become.
But, even if one looks at that period, one sees that the Government of the day did not come out of that recession without still high unemployment and, for a period, rising inflation.
The simple point is the one made rightly by the right hon. Member for Farnham (Mr. Macmillan) today and by the right hon. Member for Worthing (Mr. Higgins) on Thursday. It is that business men will not invest without some prospect of higher demand. Demand leads to investment, not the other way around.
Everywhere a business man looks at the moment is gloom. The medium-term financial strategy projects that gloom into the medium-term future. That is why the right hon. Member for Worthing said that it was so depressing, and that is why the Government should have given some spark of hope. It should riot be, it need not be, and it ought not to be a large spark. In a situation of all-pervading gloom, only a small spark is required to give business men hope. It should not have been a large spark. For that reason, the proposals of the right hon. Member for Stepney and Poplar (Mr. Shore), Labour's spokesman on these matters, were over-egging the pudding with a vengeance. He would gorge us on reflation to an extent which would lead to the spiralling inflation we had in the first two years of the last Labour Government.
The position of the right hon. Member for Stepney and Poplar is fundamentally untenable. When the hon. Member for Croydon, South (Sir W. Clark) asked the right hon. Gentleman what would happen to interest rates if he had that sort of expansion put into the economy, the right hon. Gentleman replied that the truth of the matter was that a considerable margin was involved. That was not an answer. It was an evasion. The two halves of the policy


are completely incompatible, and I thought that the right hon. Member for Down, South (Mr. Powell) did a destruction job worthy of Clemenceau on the right hon. Member for Stepney and Poplar today.

Mr. Robert Sheldon: Clemenceau lost.

Mr. Horam: Indeed, he did, but he had some part in winning the First World War. I am not defending the right hon. Member for Down, South, but I thought that he made an effective demolition speech.
In framing his Budget, the Chancellor of the Exchequer should first have had a sensible package of capital projects to offer industry. That thought has been echoed on both sides of the House. It is ironic that at The Guardian lunch to present the prize to the young business man of the year the Prime Minister addressed her remarks to an audience which included the managing director of the Laird group which itself has grown fat on public projects, including the Tyneside Metro project, bus projects and the London Underground, all of which indicate the extent to which private industry is dependent on public funding for its success. That was brought home by the success of the managing director of the Laird group.
In addition, the Government should not have increased indirect taxes, with the possible exception of those on spirits and cigarettes, as much as they did. That takes away purchasing power, and it is clear that it adds to inflation. People are rightly incredulous when a Government who claim to have as their all-pervading policy the curbing of inflation consistently increase prices. That is to repeat the mistake made in the Government's first Budget, the consequences of which they are still suffering today.
Thirdly, the Government should partially have indexed income tax.
For all those three changes, which are the relaxations of demand, it would have been necessary in part to pay. The first way of paying which would have been necessary under the approach which I adopt is to increase the standard rate of income tax. A possibly slightly better way of doing it would be to put a surcharge for one year on all rates on income tax. That is an alternative which I would suggest to balance partly the sort of expansion that I am proposing.
It is again ironic that the Prime Minister, with all her preaching about guts and morality, did not have the guts and morality to go back on this policy, because she was caught by her own promises.
It would also have been possible and right to allow a higher public sector borrowing requirement during this year. We could have allowed it to rise, with judgment displayed, to a higher but still acceptable level. It may not have been possible in those circumstances to cut the medium——

Mr. Robert Sheldon: How much?

Mr. Horam: I am not saying how much. It is impossible at this stage to forecast the PSBR from the Opposition Benches. The Government have a bad enough time getting the PSBR right. The right hon. Gentleman is now expecting me to get it right. That is an absurd question at this stage. I say that we should have allowed the PSBR to increase. If the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) insists on a figure, I suggest by at least £2 billion. At least an increase of that nature could have

been allowed, given an income tax increase and given the third proposal to which I am coming—though probably I would not have been able to achieve it on that strategy—which is a reduction in the minimum lending rate. The point made by the right hon. Members for Worthing and Farnham is fundamentally correct. More than anything else business needs a stimulus to demand. That should take priority over interest rates.

Mr. Cook: The hon. Gentleman takes great delight in saying that under the proposals of my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) certain things would happen to the MLR and the PSBR. I could dispute that. Surely the hon. Gentleman will admit that under his extremely modest package there would be no hope of unemployment coming down but that unquestionably it would continue to rise.

Mr. Horam: I do not believe that to be so. The hon. Member for Edinburgh, Cental (Mr. Cook) does not understand an important part of economics—the role of expectation and confidence. At this time it is right to expand in a controlled way. That would keep the confidence of industry and the markets. If one expands too much, confidence disappears and one faces the burden of higher interest rates, general discontent and a feeling that the wrong policy choices have been made. The hon. Member for Edinburgh, Central, is trying to get away from the reality, whereas I am facing it.
Such a mildly reflationary package would have a favourable downward effect on the value of the pound. The pound has come down in the last few months, but it should go down further. The package that I describe would restart the engines of growth without incurring unacceptable risks to inflation. That is the right balance of priorities at this time.
Another obvious weakness in the Budget is that it takes almost no account of the specific views of industry. That lead to the short, sharp meeting between the CBI and the Prime Minister shortly after the Budget. That is a fundamental error. The extent to which supply side economics—a trendy phrase which resurfaces from time to time—are absent from the Chancellor's approach is remarkable, even though we were led to believe that they were an integral part when the Conservatives came to power. President Reagan does not seem to be making such mistakes.
The fundamental argument is simple. In most successful market economies the Government have a positive and sympathetic approach to industry. They continue that positive and sympathetic approach through time on a long-term basis. In the United Kingdom many industrial leaders have been reluctant to accept that level of intervention in industry. That has been so under Governments of both parties. We now have a change.
The leading figure in the CBI is Sir Terence Beckett, who has a record of producing successful cars. The Secretary of State for Employment talked about the Metro. Ford has had three or four successes. Sir Terence is now in charge at the CBI. He is commenting in a way which was not done three or four years ago. He is saying that we can pick winners and that "planning" is not a dirty word. He is saying that privately and in public. He has the support of many industrial leaders, people who know the reality of modern, large scale industry. When that is backed up by an excellent publication produced by the CBI


just before the Budget to guide the Chancellor—"The Will to Win"—which sets out the priorities clearly, it is perversity to ignore it.
The general attitude of the CBI is praiseworthy, although certainly there are many inconsistencies in its approach. For example, it is a mistake to ask for both an expansion of the economy and for lower interest rates. However, the sense of reality and pragmatism in its proposals is about right. The CBI emphasises the necessity of having the right products. The Secretary of State's speech was about the Metro and how important it is, and he is right, but it would not be so successful if we had left private industry alone. It was brought about by private industry backed by a sympathetic Government who are willing to put money where their mouth is. That is the approach that we need for modern industry.
The CBI document emphasises the importance of people and of managing and training them. The Government have an amateurish approach to that. The document calls for changes in the institutional framework by which Government policy is produced so that industry has the right basis from which to work. It is tragic that the chance for partnership between industry and Government is being overlooked. It is tragic that the Labour Party is lumbered with proposals for nationalisation, renationalisation without compensation, and excessive public expenditure while the Tory Party is impaled on the logic of its monetarist and non-interventionist approach. That is the log-jam which the British people face. It is a political log-jam which both my old colleagues and my new colleagues are prepared to break.

Mr. Geoffrey Rippon: As expected, we have heard a moderate speech by the hon. Member for Gateshead, West (Mr. Horam). He has carefully, and rightly, distanced himself from his former colleagues. I only hope that as time passes he and his friends will find themselves finally on this side of the House.
I agree with much of what the hon. Gentleman said, but he cannot attack the monetarists' package while defending the present level of interest rates. A reduction in interest rates, which I welcome, is one of the best ways of helping industry. I hope that further reductions will be made soon.
I start from the point at which the Secretary of State began—namely, that in a period of deep depression, perhaps the worst for 50 years, only narrow options are open to the Chancellor of the Exchequer in trying to steer a sensible course between deflation and renewed inflation. My right hon. Friend the Secretary of State for Employment was right to say that there is no way in which we can, in present circumstances, justify letting the public sector borrowing requirement go up and up. It is not right for anybody to argue for a PSBR of well over £20,000 million as the Opposition did.
Whatever might be said about the Budget—I have both adverse and favourable comments to make about it—for the first time for a number of years it has focused on the reality. We have first to consider what we are spending and then to decide how we are to pay for it—whether by taxation or by borrowing.
In the long term, one of the best aspects of the Budget will be found to be what the Chancellor of the Exchequer has said about the importance of cash limits. I agree with

what my hon. Friend the Member for Wycombe (Mr. Whitney) said about that. Regardless of the emotive language that has been used and the representations about who has guts and who has courage, we can rejoice in the fact that on this occasion some damaging illusions have been stripped away. Not least of the illusions is that there is a way of controlling inflation by controlling the money supply, that money supply is controlled by high interest rates and that success is measured according to a totally unrealistic and unreliable statistic. That concept of monetarism, which I think is just bad monetarism, is now dead, and that may prove to be the best result of the Budget.
We also stripped away the illusion that by exercising that essentially soft option—the monetarist option was the wet option—there was no need for a public sector pay policy, because it was wet to seek to become involved in pay policies of the kind that failed in the past. Thirdly, we have stripped away in the Budget the illusion that the public sector can be insulated from, and treated in a different way from, the rest of the market.
It is better to concentrate on the public sector borrowing requirement than on M1 or M3—whichever is considered the least immeasurable. The trouble is that the Government, the public and, perhaps, the House focus on a specific aspect of financial policy. At one time it was the balance of payments, and the whole country was wrecked by the distortion of one month's figures, by the appearance of two jumbo jets.
Then Lord Lever had the splendid idea of getting rid of the adverse balance of payments simply by increasing the value of exports by 10 per cent. and thereby getting rid of the balancing item. Now, we do not have to worry quite so much about the balance of payments.
So first it was the balance of payments; then it was the money supply. Now, as some Opposition Members said, there is a certain danger in fixing too much attention on the PSBR, however defined. But, whatever the academic argument, the growing gap has to be closed between Government expenditure and revenue. The Prime Minister was right when she said that we must deal in facts. As my hon. Friend the Member for Wycombe said, it is paradoxical that the tough policy has resulted in a Government spending more and borrowing more than ever before.
That being so, I do not see how any of us can fail to share the Chancellor's concern about what is happening to the PSBR. He says that this year it is likely to be £13½ billion, compared with the estimated £8½ billion, and it will rise further next year if nothing is done about it. Opposition spokesmen have said "What is £5 billion here or there? It is no more than 1 per cent., and a 1 per cent. error means only £1 billion, and it is easy to be out 2 or 3 per cent." Some private companies, they said, are happy to be out only 2 or 3 per cent.—but if it is out the wrong way a private company is bankrupt. We cannot be complacent about errors of that magnitude.
We must ask ourselves: what lies behind the significant miscalculation of this year's PSBR? In part, it is the fact that we have to find more money for the nationalised industries. I do not say whether that is right or wrong. However, a far greater proportion of the PSBR increase is caused by the fact that savings elsewhere in the public sector, in such areas as housing and education, have been more than offset by the enormous and increasing cost of


servicing public debt, falling revenues due to loss of output and falling productivity, and the huge cost of unemployment.
As a result, not only will the national debt be over £100 billion by the end of this financial year but the debt interest is going up all the time. That is one reason why I have always believed that high interest rates are particularly damaging to the public sector, which is the biggest borrower of all.
Gross debt interest as a proportion of public expenditure has more than doubled since 1974–75, from about 4½ per cent. to 12 per cent. for 1980–81, according to the figures that the Chancellor gave me in a written reply on Friday. The net debt interest has gone from 2 per cent. to about 5¼ per cent. That is a high proportion of public expenditure with which to saddle future generations. They will have to pay out, and we should start now.
The cut in minimum lending rate, which did not please the hon. Member for Gateshead, West, is a welcome way to help to bring down the cost of servicing, at any rate, future debt. However, what causes more concern is the rising cost of unemployment, which, if all the relevant factors are taken into account, may amount to about £15 billion next year. Moreover, that is quite apart from the human and social consequences which my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) mentioned in his eloquent speech.
According to Treasury figures, each extra unemployed man costs the State £3,500 a year in lost revenue and the cost of benefits and free school milk and meals. The figure suggests that the rise of 900,000 unemployed adults during the past year has cost about £3 billion, at the very least. Indeed, that figure takes no account of the other costs, such as redundancy payments, loss of indirect taxes, cost of special employment measures or lost productivity.
Other Treasury figures are set out in the Monthly Economic Progress Report for February this year. They show that one unemployed single man is estimated to cost the country £4,835 a year, and a married man with two children £6,006. The very lowest figure that can be used is the £2,400 million that is paid out in direct benefits. That compares with £333 million in 1973–74.
My right hon. Friend the Prime Minister rightly says that if we agree the bill, we have to make the means available to pay for it. I agree, but the question is, what is in the bill? My concern is that we are subsidising unemployment at a time of recession when we would do better to subsidise employment, provided that it is creating real jobs and real wealth. Keynes once said that the Treasury much prefers wholly wasteful expenditure, which it can understand, to partially wasteful expenditure, to which it tries to apply some crazy cost benefit analysis.
What must concern us is not just the totality of public expenditure, which, heaven knows, is too high, but its direction. While current expenditure is rising—on unemployment, interest debt, and so on—all the figures show that fixed investment is falling steadily. That is the CBI's main objection. The CBI talks about a fall of 19½ per cent. in 1981. Today, we have heard other figures which show that it may be over 20 per cent.
My right hon. and learned Friend the Chancellor should break down the spending plans between capital and current expenditure. We could then consider how to redeploy resources so as to provide for capital projects such as construction, roads, electrification of the railways and so on.
We heard what was described by the hon. Member for Gateshead as a typically destructive speech—brilliant, of course—from the right hon. Member for Down, South (Mr. Powell). He proved again that he has the best mind in Westminster, until it is made up. He can be logically destructive, but he offered us no solution. Taking his argument, as we must, to its logical conclusion, we can see that he was saying that we should not do anything at all. He took the total figures for capital expenditure and treated them in the typical Treasury way—he was, of course, a Treasury Minister—as though there was no difference at all between capital expenditure, creating wealth and current expenditure, and as though there was no difference between borrowing to pay for a holiday, for a child's education or for a house.

Mr. Robert Taylor: If current expenditure is cut, people employed by the Government will be put out of work. If it is in order to use capital expenditure to create jobs, the jobs thus created will be only temporary; the public sector borrowing requirement will be increased by putting out of work people employed in the public sector.

Mr. Rippon: I do not think that that follows at all. I think that my hon. Friend is missing the point. I have tried to explain—the figures are clear—what it costs to pay a man to do nothing, bearing in mind all the social costs involved. I have tried to explain how in many parts of the country people could be employed on the jobs for which they are trained—for instance, in the construction industry, building roads that the nation needs and creating other infrastructure which will be essential for the recovery when it comes. Meanwhile, we are allowing extra expenditure in the nationalised industries at the expense of further pressure on the rest of the economy.
I have read the famous Stockton lecture in 1976 by my right hon. Friend who is now the Secretary of State for Industry. I thought it was very good. He said very forcefully that
for every job preserved in British Leyland, Chrysler and other foci of highly paid outdoor relief, several jobs are destroyed up and down the country.
He also concluded, no less significantly, that
monetary contraction in a mixed economy strangles the private sector unless the state sector contracts with it and reduces its take from the national income.
That is exactly what is happening, and that is why the primary aim of our strategy must be an investment-led recovery.
That does not mean, I believe, departing from the strategic objectives of fighting inflation or maintaining financial disciplines or sound money. On the contrary—this is where I agree with the right hon. Member for Heywood and Royton (Mr. Barnett)—in certain circumstances the £10·5 billion estimate of the PSBR next year may turn out to be much worse because of wrongful and wasteful spending. It does not necessarily follow, therefore, that all spending will increase the PSBR.
Accepting, as I do, that the curse of debt is worse than the curse of tax, I agree that my right hon. and learned Friend the Chancellor is right to say that the PSBR cannot just be allowed to rise. Of course it is, like M3, now described by my right hon. Friend the Secretary of State for Trade as "a wayward mistress", not an exact economic measurement. We could argue whether we should focus on the real PSBR or the nominal version. Some people want to take things out of the PSBR. These are not side


issues, but in the present circumstances we should accept, without having an inquest about past errors, that the Budget has to be tough and that that is inevitable and essential. Of course, toughness in itself is not a wonderful thing. It is better to be weakly right than toughly wrong.
Against the current background of national expenditure and debt, a shift in the burden of tax from the commercial and industrial sector to the personal sector is inevitable. The Chancellor's dilemma is that all taxation to some extent depresses demand still further and so aggravates the recession. That is a matter not of political morality but of political judgment. In present circumstances, I accept—we have only the Chancellor's estimates by which he must be bound and which we shall judge in a year's time—that my right hon. and learned Friend's judgment is right and that, to keep the PSBR at £10·5 billion, an extra £3.5 billion must be taken out in taxation. It is better for industry that we should continually reduce interest rates than that we should do some of the other things that it wants but which we may not be able to afford.
There is still the question of what is the fairest and least damaging way to apportion the £3·5 billion. I cannot believe those stories that the members of the Cabinet have had no general discussion of economic strategy. That would be incredible. It would be such a dereliction of duty on their part as to be unbelievable, bearing in mind that they have and cannot escape a collective responsibility for the strategy. However, different considerations apply to the precise way in which my right hon. and learned Friend builds up his package. Traditionally and necessarily, he bears a unique personal responsibility for that package, a responsibility that no one will envy. On the other hand, one must assume that the Cabinet knew at least as much as the rest of the House about what was in the package since virtually every detail was leaked, for the third successive time, to the press. I suppose that one can say that if the Cabinet did not know what was happening, the Treasury must have leaked the details.
Much of the package as it applies to small businesses is warmly to be welcomed. As for the rest, every one of us, told to take £3·5 billion out of the economy in taxation, would construct a different package. There are a number of issues about which I feel concerned and to which other hon. Members have referred. I mention only two. First, there is the windfall tax on bank profits. It is politically objectionable and likely to be damaging in practice. I cannot understand why a Government who do not like legislation that confers a retrospective benefit and remedies an injustice such as that which occurred under the Aircraft and Shipbuilding Industries Act 1977 should nevertheless think it constitutionally acceptable to impose retrospective taxation of the kind that we as a party have always—at any rate in Opposition—thoroughly deplored.
If the banks have made profits, they have done so because of the Government's policy of high interest rates. I have said in the House that for a time money-lending became almost the only profitable business. It was a lawful business, however, and it is arguable that the banks now need those profits, which tend to be cyclical in their operation and which will fall with the fall in interest rates, in order to help to finance small businesses into better times.
I am as concerned as some of my right hon. and hon. Friends about the effects in rural areas of the 20p petrol

increase. I am particularly concerned about the increase in the price of derv, which appears counter-productive from any point of view. I am reminded that my right hon. and learned Friend the Chancellor, when in Opposition, said of the Labour Government's proposal to increase the price by 5·5p that the tax
is deliberately biased against those who have no option about the method by which they travel to work; it is deliberately biased against those living in rural areas.
People in rural areas are already, in effect, surcharged by the fact that petrol is dearer at small rural garages. In many areas like my constituency, there is simply no alternative means of transport—neither bus nor rail. This may be another example of the Treasury's lack of understanding of the different conditions that prevail in the northern part of the kingdom from those in that part of the country, where the occupants of the Treasury normally reside, between Haywards Heath and Watford.
If I do not vote against this proposal tonight, it is because I hope that the Chancellor will have second thoughts. Perhaps he will modify it. Perhaps he will introduce a differential rate of duty or a rebate in different parts of the country. No one would travel from London to Northumberland to get a cheap gallon of petrol. I accept—it follows from what I have said already— that if my right hon. and learned Friend makes such a modification he might have to consider what further taxation is necessary elsewhere to balance the equation.
Perhaps it would be right to put a little more on income tax. After all, we were quite clear that we had two priorities—to cut income tax in the life of the Parliament and to keep down tax thresholds. I think that it is right to break away from index linking on the tax thresholds, just as it is wrong for my right hon. and learned Friend, having broken one index link, to go for another in the gilt-edged market, which may bring other troubles. We should recognise that if the Chancellor brings down the petrol tax he may have to do something elsewhere.
I end with a few words of comfort from the chairman of the Conservative Party, who made some observations that were widely circulated on 26 February. He said in a letter:
In politics the pace at which you move matters almost as much as the direction.
In that context, it might have been better to move a little more slowly on abandoning the index linking of the tax threshold. There should have been some uplift this year. I am not encouraged by the fact that the Financial Secretary has chosen this ill-timed moment to suggest that there may be a reduction in income tax, before we have even got round the difficulties of the present impositions.
It is difficult to challenge the general Budget judgment. The strategy is a collective Government responsibility, with the Chancellor holding responsibility for individual aspects. Again, I am comforted by the chairman of the Conservative Party, who wrote:
Of course we have adjusted policies in accordance with the weight of the huge recession which has developed in the world outside.
The House can be sure that we shall do so again.

Mr. R. B. Cant: I left school in 1933, when the number of unemployed was almost 3 million. I never really believed that I should live to see the day when that figure would almost be reached again.
I wish to recall an incident of which I have been reminded partly by the speech of the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) and partly by the speech of the right hon. and learned Member for Hexham (Mr. Rippon). When I was the secretary of a local society I was successful in inviting two speakers—Mr. Harold Macmillan and the late Aneurin Bevan—to debate the famous theme "Is there a middle way?" I forget the answer that was given then. I am not sure whether we have yet decided what is the middle way. The right hon. and learned Member for Hexham said that he believes that the Government have discarded total allegiance to the concept of money supply. I am not sure about that. We are in the grip of a number of monetary fanatics who have far from discarded that concept.
I became a Member of the House in 1966, and I am amazed when trying to trace the history of what happened to both sides of the House in respect of the doctrines of Milton Friedman. I well remember that a former Chancellor of the Exchequer, now a member of the Council for Social Democracy, Mr. Roy Jenkins, became a sudden convert to Friedman. I remember saying to him that he should not try to balance the balance of payments and the Budget in the course of one year. It may be that the Labour side of the House suffered in 1970 because he came so close to that objective. There was then the dash for freedom by the Conservative Government, which landed them in a spot of bother and led to the return of a Labour Government.
I was in favour of monetarism, which I regard as politically neutral. In November 1974 I asked my right hon. Friend the Member for Leeds, East (Mr. Healey) whether he would set monetary targets. He said that they did not exist. After a visit from the International Monetary Fund he came round to the point of view, with a fair measure of fanaticism, that money counted.

Mr. Rippon: Does the hon. Gentleman agree with Professor Walters, who not long ago wrote that the trouble with monetary targets was that they were largely cosmetic and were for the benefit of foreigners?

Mr. Cant: That comment has not registered in my memory. I am more familiar with his statement that the Government have got it all wrong—presumably he had signed his contract by then—and that the targets were too restrictive and rigid.
As long as the Government pursue that dogma in the way that they do, Britain faces a desperate future. Monetarism is politically neutral, but it can be grossly mishandled. The Government's determination to talk in terms of inflation being the master target, that money supply is its main determinant, and that the main determinant of the money supply is the public sector borrowing requirement overlooks many facets of the problem—for example, bank borrowing that makes a massive contribution to money supply, and over which the Government have even less control than they have over the public sector borrowing requirement.
The Government have made two fundamental errors in the pursuit of their money supply policy. First, when they took office they reduced income tax, but they had to pay for that by increasing value added tax. If any Government made one financial and psychological error of the first magnitude in their first few days in office, that was it. They pursued the policy of fighting inflation by raising

prices. We had a long string of price increases—for example, in fuel—which had a direct impact on the retail price index. Therefore, I do not know how, they thought they could persuade people not to ask for wage increases.
As the monetary target was pursued, and as the Budget became more and more unbalanced, the rate of interest was jacked up to 17 per cent. The Government put that strategy forward as an essential tool, but the secondary consequences were enormous not only in the respects that have been mentioned but because it reinforced the value of the pound—which is strong partly because it is a petro-pound. Its strength and the high interest rates meant a massive influx of short-term money from abroad which in itself sabotaged the attempt to control the money supply. A substantial proportion of money coming in from abroad gets into the sterling M3 figure. All these contradictory policies were added and there was more disequilibrium. For example, there was enormous expenditure on unemployment.
That brings me to the second major problem that is undermining the Government's attempt to carry through their monetary policy. Blame must be attached not to the politicians but to the Treasury for the gross underestimate of the level of unemployment that was to emerge from the operation of a strict monetary policy. In that regard I think that monetarism has been a total failure. We can leave others to determine whether that is because the principle is wrong or because it has been undermined in its operation.
When we consider what the Chancellor should have done, we must decide whether we accept that as a consequence of what the Government have done there is or is not a deflationary gap within the economy. Despite the fact that the money supply has increased, and despite the fact that the PSBR has burgeoned as we have observed, I believe that those who argue that there is a deflationary gap of up to 2 per cent. of the GNP are right. In those circumstances, it is reasonable for the Opposition Front Bench and for anybody else to argue realistically that there is a need to increase aggregate demand within the economy. That is not going back to Keynes.
The right hon. and learned Member for Hexham dismissed the balance of payments factor and talked, among other things, about jumbo jets. However, the balance of payments was Britain's major restraint for decades. It is always a major restraint, and more so than inflation. If we have not a balance of payments problem and if we live unto ourselves, we can please ourselves about the level of inflation. That will have an effect on distribution of output. We have a substantial balance of payments surplus which is recession-induced. As a result, we can tolerate without any problem of inflation rearing its ugly head any increase in domestic aggregate demand that will increase the level of imports.
Another major constraint is the PSBR. This is where we usually begin to throw our hands in the air, although having listened to the Chancellor and to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the former Chief Secretary to the Treasury, I may say that the magic of figures disappears somewhat into the distance. I have said for many years that the problem is not the weight of the PSBR in terms of the GNP but that of financing it.
I congratulate the Chancellor on seeking new instruments of finance. I shall not bother about "granny" bonds and savings of that sort. However, I have for a long


time been an advocate of index-linked gilts with restricted issue to pension funds. During 1976, at one of the usual meetings of Members of Parliament, merchant bankers and heads of pension funds, I asked "Would you accept index-linking plus 2 per cent?" Those concerned said that they would settle for that. That seems to be the sensible approach. I do not see any difficulty in that, although if the Lex column in the Financial Times is to be believed the Government have messed it all up again.
The pension funds are facing a future of uncertainty because they have massive power without responsibility. We must find a way of altering the present balance, otherwise my Left-wing friends, such as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), will want to introduce nationalisation measures. I merely say that there is no real problem in the approach that I have suggested, and that we can leave the technicians to determine the number of billions that make up the right figure.
The United Kingdom, especially the private industrial sector, is in a desperate situation. All the talk of coming off the bottom about now is rubbish. That will not happen until the end of the year at the very earliest.
The Government should have chosen one of three options. They should have reduced the interest rate more than they did with the object of reducing the dollar-sterling rate to at least $2 to the pound. That would have been helpful for interest rates and would have led to an equally reasonable consequence. It seems that the Government are prepared to accept inflation as a consequence of their proposals. It is clear that they are prepared to put 2 per cent. on the RPI. A reduction in the dollar-sterling rate would have discouraged costlier imports and would have given manufacturers the fillip to export that they will need this year.
The Government have said that there will be a decline in imports. If we wish to avoid that, the Government could make a substantial reduction in indirect taxes and so add to aggregate demand without inflation. For example, VAT could have been reduced by 25 per cent. I favour the suggestion that the Chancellor should have said "The Budget this year is for industry." Private industry has suffered. It is a massive source of wealth for the nation and the Chancellor should have taken the risk, if risk it is, of taking action to assist it. There is no doubt that there would have been a public investment spin-off. I should have gone for a reimposition of the accelerated investment scheme. The Government have missed a marvellous opportunity by failing to take action.
I must have been in a masochistic mood when I denied myself the great pleasure and enlightenment of listening to the Chancellor deliver his Budget Statement. I watched the television programme. Alan Lord, the former Treasury man and now head of Dunlop Holdings, was a little alarmed as he listened to the imposition of the indirect taxes. The Chancellor then spoke about the need to help industry. We received the crumbs from the table—help for small businesses, assistance with energy costs, and so on. He said to Peter Oppenheimer, the economist, that they were still waiting for the big numbers. Those big numbers represented the help which private industry expected the Government to give them through the Budget, but it never came. Those gentlemen were left looking into a deflationary void.
We should sometimes remember Churchill's statement that he would not preside over the liquidation of the British Empire. The Government are in fact presiding over the liquidation of British industry. The time has come to call a halt.

Sir William Clark: It is a pleasure to follow the hon. Member for Stoke-on-Trent, Central (Mr. Cant). I do not agree with him that we should reduce VAT by 25 per cent. That would add over £3,000 million to the PSBR.
Various speakers have treated our economic situation as if it occurred only in May 1979. One must take each Budget in conjunction with the others. If one looks back to 1979, three things made this Government's job more difficult. The first was that there was rising inflation when the Government took over. When there is rising inflation, it is difficult to turn it down. Secondly—the Opposition should not be allowed to forget this—the number of postdated cheques left for the Government to pick up put us a little off course. Thirdly, when we took over there was a world recession and it was increasing in severity.
I welcome the Budget, although I have some reservations about parts of it. Various speakers have referred to the PSBR. It is easy to ask whether it should be 4 per cent. of the gross domestic product, 6 per cent. or whatever. My right hon. and learned Friend the Member for Hexham (Mr. Rippon) hit the nail on the head when he said that the national debt today was just over £1,000 million. I remind hon. Members that the servicing of the national debt next year will cost £11,000 million. If I put that in ordinary financial figures, it means that the interest which the Government of this country are paying on the national debt is about £20,000 for every minute of every day, including Saturdays and Sundays. When hon. Members talk blandly about increasing the PSBR, that is nonsense. My right hon. and learned Friend was right to cut borrowing by £3·5 billion. Everyone knows that one must decide either to print the money or to tax to cut the PSBR.
That is the reason for the £3½ billion increase in taxation. I remind hon. Members that that is on indirect taxes. Tobacco and alcohol have not been indexed for some time. Whisky is cheaper to drink now than it was in 1975. The Chancellor of the Exchequer was not wrong to increase the duty on tobacco, spirits, and alcohol. The same principle applies to petrol. I do not like the increase of 20p on petrol, nor do I like the increase on tobacco or drink. However, if the Chancellor of the Exchequer has to find the money, where can he find it? Hon. Members will remember that in our manifesto we went to the country on the principle that the emphasis of taxation would be switched from direct taxation—that is, PAYE—to indirect taxation. That is a continuation of what we promised. Other goods which we need for living have gone up in price. I cannot see why alcohol, tobacco and petrol should not go up.
Some of my hon. Friends may find that unpalatable. I know that it is difficult to face such an increase in rural areas. However, if the revenue is not obtained from petrol, the PSBR will go up, the national debt will increase and that would be a further millstone around the necks of future generations.
I have a reservation about bank profits. The Government have taken a retrograde step and are


penalising success. I have no vested interest in banks except that I have a bank account. However, it is wrong to think that all bank profits come from the increase in the MLR or the interest rates. A great proportion of bank profits come from overseas activities. That is a success story for the banks. My right hon. and learned Friend said that that was once and for all. How many of us have heard about "once and for all" before? When income tax was introduced, it was to be once and for all.
I understand that the banks have agreed to a 20 per cent. guarantee on the loan guarantee system, where the Government guarantees the other 80 per cent. The banks guaranteed that before they knew that the windfall profit tax would be imposed. The banks have told me that they have a ratio of 15:1 for lending. If they pay £400 million in tax, their lending potential will be decreased by about £6 billion. I would have preferred it if my righ hon. and learned Friend had doubled or increased the betting and gaming tax. We dealt with tobacco, spirits and petrol, but we should have done something about the betting and gaming tax.
In the coming year the Chancellor of the Exchequer must closely consider the indexation of social benefits. I am not speaking about the retirement pension, but the indexation—albeit at 9 per cent.—of social benefits. The country cannot afford to continue that. The person who is working is dependent upon the profitability of his firm and he may obtain a 2, 4 or 5 per cent. increase in his income, whereas social benefits receive a tax-free increase of about 9 per cent.
That leads me to another reservation which I have about the Budget, which is the £1 billion of index-linked bonds which the Government will issue. I do not know whether that is the thin end of the wedge of the Scott report. That report recommended that, whereas civil servants and some members of the public sector received inflation-proof pensions, those pensions should not be taken away but the private sector should have similar pensions. I hope that that is not the thin end of the wedge because if the pension funds in the private sector buy those bonds and more bonds are on offer, eventually the pension funds will be invested in the main in those indexed bonds under the control of the Government.
That has two dangers. The first is that nationalisation would be easy. If the bulk of the pension funds were with the Government, nationalisation could be carried out at the stroke of a pen. Secondly, the Government would be able to borrow their money much more easily. That is bad for any Government. Index-linked bonds are a bad thing. I hope that my right hon. and learned Friend will say something about the bonds and about the Government's attitude to the Scott report. The Government must grasp the nettle. The taxpayer cannot continue fully to inflation-proof pensions in the public sector while people in the private sector, who are supplying the money, have only 3 or 4 per cent. inflation-proofing in their pension schemes.
As an aside, I hope that the Government will stand firm on the Civil Service strike. With an inflation-proofed pension, a guaranteed job and good holidays, I do not understand why, when they are offered 7 per cent.—and many people in the private sector are offered much less—the civil servants are striking. I hope that the Government will not succumb to blackmail.
I, too, welcome the relief for small businesses—removing corporation tax, the VAT threshold and the start-up provision. The provision for investing

£10,000 in a new business will have a dramatic and dynamic effect on the setting up of companies. There is also the 2 per cent. reduction in MLR.
I take issue with those who say that nothing has been done for larger businesses. Under the stock relief scheme, £450 million is being given as an encouragement to big business. That is no mean sum. Large users of gas and electricity also get the advantage of a further £120 million, which makes a total of £570 million. Labour Members may say that the 2 per cent. drop in MLR and the other measures are not sufficient. However, if we accept the premise that we must stop spending money that we do not have, we realise that we must cut our coat according to the cloth.
When the exchange rate was low, big business complained; when it is high, it complains. Where do we go from there? The right hon. Member for Down, South (Mr. Powell) dealt very adequately with the rubbish that is spoken about the exchange rate. How does one manipulate the exchange rate? Should the Government, with taxpayers' money, buy foreign currency and sell sterling? That has not worked in the past. Although sterling is strong, at $2.20, $2.22 or $2.25 to the pound, our exports have kept up remarkably well. The deutschemark has been a strong currency for many years. I do not remember the Germans complaining that they could not export. Why should we complain? The only way that we could have a drop in our exchange rate—and this may appeal to some Opposition Members—is with a change of Government. The disaster that would result would certainly bring down the exchange rate. No one in his right mind believes that that is the right way to proceed.
The Government have much to do. We must increase our competitiveness. Our economic survival depends on more action over restrictive practices, the closed shop and the monopoly position of some trade unions—although those matters are not the direct responsibility of the Chancellor. I hope, too, that my right hon. Friend the Prime Minister and the Cabinet will deal with nationalised industries with vigour. We have for a long time stated that we should sell this, that and the other, but there has always been the excuse that this is not the profitable time to do so. Let us sell convertible debentures and deferred preference shares, with the underlying asset value as the sale price and with the conversion showing the profitability that must come about. Nationalised industries are ripe for a more vigorous approach in disposing of certain sectors. They are too greatly favoured. Over-manning is manifest in the public sector. Everything comes from the taxpayer, such as generous redundancy payments and pensions, which private enterprise cannot afford. That aspect must be tackled.
The Chancellor of the Exchequer and the Treasury team have an almost impossible job in controlling expenditure. The Budget is agreed at the beginning of the year, and that is it. There is no monitoring of how the money is spent within each Department—and I do not single out any particular Department. The Treasury should adopt the practice used in industry and have a finance Minister m each spending Department eventually responsible to the Chancellor.
I agree with my right hon. Friend the Member for Farnham (Mr. Macmillan) and my right hon. and learned Friend the Member for Hexham. We need a differentiation between current expenditure—revenue expenditure—and capital expenditure. However, we must be careful, if we


concentrate on monitoring capital expenditure, that revenue expenditure does not remain at its present high level. We need to take a sharp Geddes axe to current expenditure.
I welcome the help given in the Budget to families, the disabled and charities, which gives the lie to those who would suggest that the Conservative Party is not a caring party. The help given to one-parent families, child benefit and the help given to disabled people disproves that. However, the best help that we can give to anyone is to conquer inflation. Inflation is coming down, and will come down even further.
We should not be gloomy and believe that all our troubles began in May 1979. The Government inherited world recession and many other messes. We must continue our strategy and not change course. We are on the right road. I am convinced that the economy will pick up. When the recession ends, with the cut in Government spending and the increase in economic activity—which will help to increase the country's revenue—we shall be able to reduce taxation. I welcome this "sound money" Budget.

Mr. Eric S. Heffer: The hon. Member for Croydon, South (Sir W. Clark) and others who argue that we should not change course remind me of the old joke about the Irishman who had just managed to get his horse used to going without food and water when, unfortunately, the horse died. That is happening with the Government's policies.
The hon. Gentleman said that some people felt that we should have a change of Government, but that right-minded people did not think so. I have news for him. Millions of right-minded people in this country are anxiously waiting for a change of Government. If the right hon. Lady and her right hon. Friends feel so confident about their policies, they should test them at the polls.
This is the Government's third Budget and the most disastrous yet. Three aspects must be emphasised. First, it is a massively deflationary Budget. Secondly, because of that, it is bound to lead to further unemployment. The prospect of more than 3 million unemployed is no longer mythical. It now seems almost certain. Thirdly, the low paid and those on low incomes are especially hit by the Government's policies.
It is not only the low paid who are hit by the Budget. Anyone who read the interesting series of articles on the effects of the Budget in The Sunday Times Business News yesterday knows that those in the higher income bracket will be clobbered equally. [HON. MEMBERS: "More."] It is relative. Those with very high incomes are clobbered more in money terms, but in real terms those with lower incomes are hurt more, especially by the increase in indirect taxation, which is the most regressive taxation.
We are told that there is more coming. The hon. Member for Croydon, South said that we needed a Geddes axe. I do not know whether Conservative Members were worried by that. I am sure that some of them were very worried when the Financial Secretary said on television yesterday that further cuts in public expenditure are being considered by the Government and are likely to come in the autumn. Is that not a Geddes axe? Is that not what happened in the depression?
If there is an increase in public expenditure, as there has been precisely because unemployment benefit has to be paid out, how and where can the Government cut back? My guess is that one area in which there will be further cuts—there are already cuts in real terms—will be in unemployment, sickness and other benefits. That is what happened in the 1930s. The Government's concept is that the crisis has to be solved at the expense of ordinary working people by cutting back on public expenditure in that way.
Those who read this morning's article in The Guardian by Francis Cripps and Wynne Godley know that they were not exaggerating in saying that this is
A Budget that will produce a hyper-slump such as Britain has not seen before".
That is clear, quite apart from the speeches that we have heard from the wets and the super-wets. Even the drys are now joining us. Others are wet or dry on different occasions. Nevertheless, I welcome the fact that Conservative Members have sufficient courage to speak out on these matters.
Some of us used to do that regularly when the Labour Party was in Government. We also translated our words into action, although not always into votes, I admit. On occasion, whole rows of us would remain in our seats when we felt that the issues made it necessary to do so. I would never suggest, of course, that Conservative Members should oppose their Government in the Lobby, but if they were to follow the example that we used to set I am sure that it would be in the interests of the country.
Most of the press this weekend, whether Tory or not, gave the Government a real go-along, to use a Liverpool expression. We also read the Chancellor's defence of the Budget. What a pathetic piece of writing it was. I do not refer merely to its literary value, although that was not very good either. I cannot imagine anyone reading that defence of the Budget proposals and being convinced that the Chancellor was making a serious case.
While talking about the Chancellor, I would make one further comment. When I first came to the House, when we had serious debates here, those speaking for the Front Bench actually attended the debates. Nowadays, Ministers are so arrogant that they do not regard it as necessary even to listen to their own hon. Friends who may have criticisms to make. That attitude ought to be changed. The Minister of State should tell the Chancellor that if he is to reply he should be in his place and listen to what is said in the debate.

Mr. D. N. Campbell-Savours: He is hiding away.

Mr. Heffer: This is a debating chamber. The people expect Ministers to listen to what their representatives say. It is disgraceful that such an attitude should have developed. On the strategy adopted by the Government, I agree with what my right hon. Friend the Leader of the Opposition said in Blackpool on Saturday. He said that some people believed that we should get rid of the Chancellor, but that was not the solution. He was suggesting not that we should retain the Chancellor, but that the real villain was the Prime Minister. Not only is the Prime Minister the real villain; every Minister who goes along with this policy is part of the villainy. If they are really determined to fight this, they had better either make a quick change or get out of the Government so as not to be responsible for the policies that are being pursued.

Mr. Campbell-Savours: Tell us about Liverpool, Eric.

Mr. Heffer: I was about to come to the effect of the Budget on Merseyside. We all know the present situation on Merseyside. It is an industrial disaster area. The unemployment rate is 16 per cent. throughout Merseyside. I am not talking just about the city of Liverpool, but about the whole of Merseyside which includes some areas where there are no industries at all. There is no hope for those workers. Certainly, there is no hope for them in the Budget. On the contrary, they will now be faced with further redundancies and more unemployment.
The future is bleak, not only for the youth—although it is particularly bleak for them—but also for workers who have spent perhaps 30 or 35 years working for the same firm and who suddenly find themselves out of work. That is a traumatic experience. I was a building worker, so I am used to unemployment, although not for long periods. Nevertheless, I knew what it was like to get my cards and to have to look for another job. It was part of my industry. But I often think of the worker who has been in the same job for 30 years or more, bringing up his children, with his mortgage, his small car, and so on, suddenly finding that the bottom of his world has dropped out. There is no future, no hope, no work, and it is no good looking to other parts of the country for employment because there is none. Therefore, the Government's policy is disastrous for people such as those who live in my area. The trouble is that their policy is basically wrong.
My right hon. Friend the Member for Heywood and Royton (Mr. Barnett) said that the Government were mesmerised by the PSBR. In my opinion, they have elevated it into a phallic symbol which I find quite obscene and disgraceful. It is high time that they stopped worshipping such a symbol.
My right hon. Friend the Member for Chesterfield (Mr. Varley) rightly pointed out that the Government's proposal for the construction industry was minimal, that it did not add up to a row of beans. The Chancellor said that it was sensible to remove unnecessary obstacles to developments in the industry. That is reasonable as far as it goes, but the sector which the Government could truly have helped is house building, whose plight is as bad as it has ever been. In fact, the programme in that sector for 1981–82 has been cut by 12½ per cent. compared with 1980–81; by 40 per cent. compared with Labour's last year in office; and by more than 60 per cent. compared with 1975–76. Yet thousands of construction workers are out of work and thousands more people have gone on housing waiting lists and suffer all sorts of problems because they do not have homes of their own.
The construction industry needs not the tinkering that the Government have produced but an enhanced building programme, particularly for public housing. We need a much more positive programme for building factories, through local authorities, the Department of Industry and other agencies.
Incidentally, I do not understand why the right hon. Member for Down, South (Mr. Powell) shall have had a go at my right hon. Friend the Member for Chesterfield about his sensible proposals for these industries. These are labour-intensive industries. I am certain that the right hon. Gentleman would be happy to accept such assistance for Northern Ireland. I am sure that every other hon. Member would like such assistance for his area.

Mr. J. Enoch Powell: I just wanted to know where the money would be obtained from.

Mr. Heffer: The right hon. Gentleman must know that we have been arguing that the entire strategy needs to be changed. If one is tied to a narrow monetarist concept, one will always take the view that there is never a chance of finding the money.

Mr. Tim Eggar: Answer the question.

Mr. Heffer: The hon. Gentleman does not have to shout. I do not normally shout at the hon. Gentleman. If he wants that sort of conflict, we can have it. I have been explaining—

Mr. Eggar: The alternative strategy.

Mr. Heffer: I have not mentioned the alternative strategy. However, if the hon. Gentleman wants me to explain Labour's alternative strategy in detail, I am quite happy to do so. For his benefit, I have a three-page, 10-point policy which outlines the alternative strategy. But I have a sneaking feeling that as I have already taken up a lot of time, the hon. Gentleman and the House would not take too kindly to my explaining it. In the short term, the money will be found by a change in economic strategy. [HON. MEMBERS: "Spell it out".] I cannot spell it out in one sentence.

Mr. Campbell-Savours: More taxes.

Mr. Heffer: If need be, part of it would come from more taxes. No one should shy away from the fact that part of a new economic strategy would comprise more taxes, particularly taxes from those in society who can afford to pay, rather than from those who cannot afford to pay, which is what is happening now.

Mr. Eggar: rose——

Mr. Heffer: No, I shall not give way. The hon. Gentleman knows that this is a short debate.

Mr. Eggar: How much money?

Mr. Heffer: Some Conservative Members do not always treat these matters with the seriousness they deserve. We are talking about millions of working people out of work, and we are talking about trying to get the economy right. Conservative Members get serious only when they find that their own companies and interests are involved. Then some of them scream their heads off. We are not concerned with individual companies. We are concerned with the people and with the country's economy. We are concerned about what the Government are doing to them, which is utterly disastrous.

Mr. Charles Morrison: Many of us had great sympathy with the hon. Member for Liverpool, Walton (Mr. Heffer) when he referred to the levels of unemployment in his constituency. They are bad enough in my own, but by no stretch of the imagination, thank heavens, do they compare with those in the hon. Gentleman's constituency. However, he does not help his case when he produces woolly solutions and refuses to answer entirely reasonable questions.
It would have been a hard-hearted, insensitive or prejudiced person who would not have had a great deal of sympathy with the Chancellor of the Exchequer as he set


about preparing his Budget. Granted, and much to the Government's credit, inflation is running at half the level of last summer, but otherwise the outlook was anything but rosy. I at least did not entertain the highest of hopes with regard to the Budget. More than usual, it seemed to me that it would have to be based on an assessment of risks and judgments of the lesser of two evils. Almost for sure it was likely to hit at consumption, and if that was to make it an unpopular Budget it had to be accepted as one consequence of the world recession and current conditions.
Nevertheless, I had hoped that the Budget would contain some imaginative initiatives which would have provided dividends for the country in the future, and which would have provided recognition that the Government have a role in the creation of healthier domestic conditions. I regret that it does not contain those initiatives and that my assessment of risks and judgments of the lesser of evils does not coincide more precisely with that of the Chancellor's.
Of course, I congratulate the Chancellor on what he has done for the disabled, and I am glad that he has again set about doing more for small businesses. I shall refer briefly to them again in a few moments. Otherwise I find little in the Budget about which I can be very happy. Given the limitation of public transport and the unavoidable needs of country people, commuters—we should not forget the needs of commuters—road transport and all manner of businesses, 20p on petrol and dery seems excessive. More important, I am very distressed that in this year—for the first time for 10 years—there is to be no increase in personal allowances.
I accept that it might not have been possible to go the whole way to meet the Rooker-Wise requirement. Nevertheless, on the basis of the lesser of two evils, and contrary to my own advice in a letter to the Chancellor published in The Times only three weeks ago—when I had no idea of the extent to which he intended to increase taxation—in my view now it would have been preferable to put 3p on the standard rate of income tax. That would have produced about £2·3 billion. As a result, the Chancellor could have limited his petrol and dery increase to 10p—just about the maximum that would have been acceptable to the public at large—and he could have used the remaining £1,700 million to increase allowances by about 10 per cent.
This rejigging of tax increases would have been fairer to car users, fairer to businesses, and fairer to those on lower incomes who are just in, or who will soon come into, the tax bracket, and who are affected by this increase in taxation. I doubt whether an increase in income tax would have been popular, but it certainly would have spread the tax load more fairly.
It is the lack of a positive side to the Budget that worries me most. The understandable but obsessional concern about inflation, and the threat it poses for employment prospects, seems to have erased very largely, if not entirely, any thought that deflation is just as capable of causing unemployment. I know that the Chief Secretary said last week'
I do not think that it can remotely be described as deflationary".—[Official Report, 11 March 1981; Vol. 1000, c. 920.]

But his view and that of other Treasury Ministers does not seem to be shared by much of industry.
I should also like to point out, following remarks made earlier, that the levy to be imposed upon the banks in itself can be deflationary, given that it can give rise to a reduction in lending of up to £6 billion.
But whether or not the Budget causes an extra 200,000 or more to become unemployed, as some commentators have claimed, at my most optimistic I cannot see that it will do anything to reduce or stabilise the present horrifyingly high level of unemployment. For that to happen, it seems that we have to await the assumed benefits of the laissez faire industrial policy, coupled with an end to the recession. But that seems to be nineteenth century stuff which is not very much in accord with Conservative philosophy, and never has been. In any case, who can be sure that the recession is near its end? There is no certainty about it.
I regret enormously that the Budget misses a necessary and Heaven-sent opportunity to start the development of a new partnership with industry, as exists in many of our competitor countries. I regret that it contains no industrial package, and I regret that it has done so little to contain unemployment.
The reduction in minimum lending rate undoubtedly will be a help, but it is only of marginal relief if the order book is empty. Thus, like others who have spoken in the debate—notably my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas)—I should have liked to see the Government initiate a programme of capital investment in roads, railways, housing, telecommunications and other basic national requirements.
At one and the same time, such a programme would be of great help to the private sector in the short term, and in the immediate term it would help to put our country into a more competitive position when eventually the world recession ends. Such an approach would do more than anything else also to assist small businesses, because most small businesses exist to provide services or components for big businesses.
No doubt, as my right hon. Friend the Member for Taunton (Mr. du Cann) has said, much could be done through the City of London and the private sector, but if there has to be some lubrication or stimulus from Government, why not, even if it gives rise to some expense?
I wonder whether a PSBR of £10½ billion is definitely right in present conditions. In his powerful defence of the Budget on Wednesday—as good a speech as he could have possibly made in the circumstances, if I may rather presumptuously say so—the Chief Secretary referred to the possibility of a "massively inflationary reflation". If a PSBR of £10½ billion is not inflationary, I find it difficult to believe that a PSBR of £11 billion or £12 billion would be massively inflationary. Least of all can I believe that if account is taken of the industrial output that it could stimulate and the unemployment costs that it could save.
It is for me a source of constant amazement that the Government are apparently prepared to lash out more and more money in unemployment benefit, to no purpose and for no return, and yet a battle royal is needed to persuade them to use a little money for any constructive purposes which might reduce unemployment costs—costs which, as my right hon. and learned Friend the Member for Hexham (Mr. Rippon) has pointed out, could be as high as £15 billion next year.
My right hon. Friend the Secretary of State for Employment has done very well with his development of the special temporary employment programme, the youth opportunities programme and the community industries programme. But, looking into the future, the manpower need of manufacturing industry is bound to fall steadily with the introduction of new technology. I doubt whether the service industries will make up for the loss of jobs, even with a major expansion in leisure industries, as I believe there should be and probably will be. Thus, the Government must also consider extending the job release scheme in the short term, and they will have to give much more careful consideration to the possibility of lowering the age of retirement for men in the longer term.
Given that in the end we are concerned with people rather than book-keeping, if a risk has to be taken by the Chancellor, it should be on behalf of people rather than on behalf of the books. Yet the Chancellor seems to have opted for the latter, and in doing so the danger of the creation of an industrial desert in this country has been brought nearer.
This has been a disappointing Budget, and a Budget of lost opportunity. I will leave the Chancellor with one thought. Deserts may look very tidy. Sometimes, even, they may be very beautiful, so long as one is only a visitor to them. But if one wants anything to grow in them, one does not need a flood, because that could sweep everything away, but a modicum of wetness is needed, and it is largely up to the Government to provide the irrigation.

Mr. Guy Barnett: The hon. Member for Devizes (Mr. Morrison) was critical of the Chancellor of the Exchequer's Budget. I sympathise with much of what he said. He began by sympathising with the fact that the Chancellor faced such a daunting task. He remarked that the Government had succeeded in reducing the rate of inflation. Although the Government have reduced inflation to a level that is several points above that found when the Conservative Party took office, they have nevertheless, reduced it. Indeed, the fact that they have done so forms a major part of the Government's propaganda and publicity.
Given the Government's theories, how have they managed to lower the rate of inflation? I have never received a satisfactory explanation. In what sense is the reduction of inflation related to their strategy? We are told that inflation is caused by an accelerating growth in the money supply. However, that is precisely what we have experienced. I am puzzled. On what basis can the Government claim that they are responsible for reducing inflation to a level that is slightly above that at which they came into power?
I was also interested when the hon. Gentleman spoke about creating a desert. A famous author said that the Romans created a desert and called it peace. I do not know what the Chancellor thinks he has created, but it is nothing like peace. In the 1980s the British economy will face a dangerous situation. The Government also claim to have cut interest rates. Presumably, they want to reduce interest rates to assist industry. However, the Chancellor of the Exchequer, the Prime Minister and other spokesmen repeatedly told us that it was impossible to cut interest rates before the public sector borrowing requirement had been reduced. How can the Chancellor cut the interest rate for the second time in a year when the public sector

borrowing requirement has not been reduced? Nevertheless, the purpose of the reduction in interest rates appears to be to assist industry. Indeed, the problems of some firms have been alleviated to some degree.
Recently, an industrialist in my constituency commented that reduced interest rates were hardly any help to his firm. Like many medium and large-sized companies, his company had had to borrow large sums of money to fund redundancy payments to one-quarter of those employed when the Conservative Party came into power. It is unrealistic to pretend that cutting the interest rate will enable such companies to invest more or to restock. A company will invest and stock up in the expectation of a future market. However, a direct consequence of this deflationary Budget will be to dissuade companies from doing the very things that the Government desire. If manufacturing industry is to operate successfully, it needs markets. However, that same industrialist told me that his company finds that the home market is virtually dead. As a result of energy prices and the high value of the pound, the export market, on which that company is heavily dependent, has virtually disappeared. Indeed, over 40 per cent. of that company's products were destined for export markets.
The CBI and business men to whom I have spoken have not described the Budget as helpful. When the Conservative Party first came into office it advanced the argument that British industry should become more competitive. The Government argued that one consequence of an inflationary Budget, or of an inflationary economic policy, was that private industry became uncompetitive and ceased to be careful about costs. They argued that industry was wasteful and inattentive to its markets. During the first few months of this Government's period of office local industrialists in my constituency commented that the Government's initial economic policy was having a healthy effect on industry and was forcing industry to be more competitive and responsive to home and overseas markets. Contrary to the Government's other policies, many argued that it would have a beneficial effect on British industry. That perfectly respectable argument was put forward by industrialists and Conservative Members.
But we have now passed the point at which industry was becoming more competitive. In consequence of the more stringent economic policies being pursued by the Government, there is now a severe danger of a collapse of business confidence. Industrialists in my constituency are beginning to wonder whether there is any purpose in staying in business at all. That is the view of effective business men and companies.
I can accept the argument that a stringently run economic policy has the effect of driving out of business uncompetitive and inefficient firms or, alternatively, of persuading them to be more effective and responsive to the markets that they are trying to serve. But we have gone beyond that purpose now.
The situation is becoming very dangerous. An industrialist in my constituency, in a letter to me, said:
The budget appears to have totally ignored the considerable strain on management at all levels to try and hold their business together in a dramatically declining market and the strain on workers, for whom there is little job security. A more sensitive budget would have given some hope—this one gave no hope of any improvement and is looked on as another step in creating art industrial desert.


That is a most devastating criticism of the Budget. As my right hon. Friend the Leader of the Opposition said, it is a no-hope Budget. It is destructive of British industry and of some of our finest firms, both large and medium sized. Whatever help we can give to small firms is to be welcomed. Having had responsibility for that sector in the Department of the Environment in the Labour Government, I welcome such help. However, it will be as nothing if the large and medium sized firms, to which small firms are often the suppliers, collapse and thus provide no markets for their products. The Budget will strike a severe blow at business confidence, at any hope of an increased level of investment and at any possibility of long term planning of the kind that we must have to revive our economy.
I have so far been talking about manufacturing industry. However, the Estates Times, which I think is sent to all hon. Members, carries a front page article headed:
Sir Geoffrey's silver lining for property world.
I want to read the first couple of paragraphs, because they illustrate the degree to which the property world stands to benefit and manufacturing stands to be severely affected. It states:
In one of the most helpful Budgets the property world has experienced for years, Chancellor Sir Geoffrey Howe has given developers a series of fiscal boosts involving development land tax and industrial building allowances.
While most of British industry licks its wounds in the aftermath of Tuesday's statement, generally aimed at helping small businesses, property men are taking comfort from the unexpected measures which will encourage more building and refurbishment.
Good luck to them. But I am very worried about the state of manufacturing industry. The Budget can do nothing but damage. I can understand the dismay and concern of Conservative Members. I have deliberately said nothing about the policies that the Labour Party would want to pursue if it were in power. I have tried to point to the damage that is likely to be caused by the Government's policies. Therefore, as I said, I can well understand the dismay of Conservative Members.

Mr. Albert McQuarrie: I am grateful for this opportunity to address the House today, because this is the first occasion on which a Member from Scotland has been able to say something in the Chamber about the Budget. I note particularly that the two hon. Members who represent constituencies under the label of Scottish nationalists have not seen fit to be in their places all day today.
My right hon. and learned Friend the Member for Hexham (Mr. Rippon) and my hon. Friend the Member for Devizes (Mr. Morrison) are two Members who took the trouble to mention this afternoon the question of the fuel tax. I draw the attention of the House to one of many hundreds of telegrams which have been sent to Scottish Members on the question of the fuel tax. It says:
Fully support you in your attempt to remove the iniquitous and monstrous increases in the duty on fuel. These increases may be fine for south-east England but will have a disastrous effect on rural areas in Scotland.
That says it all, in a nutshell.
Although I accept and appreciate that the Budget contained a number of aids to the disabled, the retired and to small businesses, the decision to increase the cost of

petrol by 20p per gallon will have a devastating effect on the whole of the rural constituencies and the islands of Scotland, and on my constituency of East Aberdeenshire in particular. If 20p is added, it will mean not 149p per gallon, as is seen in London, but 165p a gallon in my area of Scotland, and in other parts it will mean 180p and 192p a gallon. That is if that minimum figure is added, although I suspect that the operators will need to add another 2p on to that price for the simple reason that, whenever a small service operator purchases his next 5,000 gallons, he will have to find a further £1,000 to do so, and he will have three days in which to do it. There is no way in which small operators are able to take that in hand at present, because of their difficulties in raising money. Therefore, the interest rates that they will have to pay will be reflected in the price. In some cases one will find that many of the smaller service stations will go out of business altogether.
Minibus operators in Scotland who take children to school will be seriously affected. They take a contract from the local authority for a period of three years at a fixed price, after a tender. There is no way in which they can recover this iniquitous 20p. increase. One of my constituents, to whom I spoke over the weekend, advised me that the increase would amount to £500 in the year. That is much more than the profit that he would estimate making as a result of a competitive bid to the local authority. Again, this will mean that a number of these small operators will have to go out of business altogether. Then the danger will be that children will not be able to be taken to school, or their parents will be put to great bother in order to try to ferry them backwards and forwards to school at very inconvenient times for them.
The farmers in Scotland have had a very difficult year, unlike farmers in England. [HON. MEMBERS: "Oh."] I have heard from members of the Back Bench agricultural committee that last year farmers in England never had it so good. [Interruption.] If that is untrue, I have to accept that the hon. Members who made the comments do not know their facts. However, I can speak for farmers in Scotland, whose income, in real terms, fell by 52 per cent. last year. This increase in fuel duty will be the last straw which will break the camel's back.
The Scottish agriculture industry has suffered severely over the last few years. The situation was desperate enough before this latest imposition, which can only lead to many farms having to be sold. In the Aberdeen mart at present there are 143 farms on the books for sale.
The fishing industry, of which we have heard much in the House recently, both offshore and onshore industries, will not be able to withstand this increase in the price of fuel. This House is well aware of the desperate state of the fishing industry. Many of its problems can be laid at the door of the cost of fuel oil. To add a further burden to industry will lead to massive bankruptcies at a time when we who represent fishing constituencies are trying desperately to save it from extinction.
Industry and commerce in the rural areas will suffer considerably as the impact of the 20p. a gallon increase leads to increases in the prices of all commodities and of services coming from and going into the rural areas. For many years, great endeavours have been made to repopulate the rural areas. Sadly, this crippling blow will do just the reverse. With no public transport to speak of, the loss of the minibuses and the inability of people living in rural areas to pay the increases which will be forced on


them from all quarters, we shall soon begin to see an exodus from the rural areas and islands far greater and quicker than the Highland clearances ever created.
There must be some way that relief can be granted. It is ironic that the gas and oil from the North Sea to the mainland arrives in my constituency to feed the rest of the United Kingdom and to be exported to the benefit of the nation; yet my constituents will be the most adversely affected by this penal tax.
Local authorities in northern areas have done their best in rating terms. In my area, the Grampian regional council increased rates by only 11p. Banff and Buchan district council did not increase its rates at all this year. Gordon district council actually had a 3p reduction in its rates.
But what is the impact of this increase of 20p in the price of fuel likely to be? Grampian regional council will be required to find an additional £20,000 to meet increased fuel bills. Banff and Buchan district council will be required to find £10,500, and Gordon district council will have to find £9,300. How can they do this after they have fixed their budgets? There is no way in which they can find this money unless the Chancellor of the Exchequer changes his mind today and decides that there is some method by which the money can be raised other than by imposing on rural areas this iniquitous tax of 20p on the price of a gallon of petrol.
My attention was drawn yesterday to an article in the Sunday Express by the Chancellor of the Exchequer. It was headed:
Do you think I wanted to slap 20p on petrol?
My right hon. and learned Friend wrote:
That is why the tax revenue needed to balance the books has had to come from people's pockets. I have had to raise that extra money in every way possible. I should not be looking for an extra 20p on a gallon of petrol if I had been able to find a better and less unpopular alternative.
I have a message for my right hon. and learned Friend. There are alternatives. Why not impose further levies on gambling—on all sorts of gambling?

Mrs. Elaine Kellett-Bowman: One-armed bandits.

Mr. McQuarrie: Gambling is the greatest growth industry in Britain today. Why not invade the Space Invader? This is the machine that came into the country in 1978, and now there are 70,000 of them. As I enter my airport at Aberdeen, having flown back there from this House, it is like entering the aerodrome at Las Vegas, with one-armed bandits going, right, left and centre.

Mr. Eggar: rose——

Mr. McQuarrie: I am sorry. I cannot give way to my hon. Friend. My time is limited. It is estimated that 83 per cent. of the population are playing these Space Invaders. If my right hon. and learned Friend had decided to double the present taxation on betting and gambling, I am certain that he could have raised £510 million, equivalent to the lop per gallon which we require to reduce his proposed tax from 20p to a figure which, although still unacceptable, we would take at this stage.
The imposition of an increase of 20p will again have a devastating effect on the cost of freight in rural areas. Vehicle excise duty will be increased by £58 million and the fuel duty by £290 million. That represents a total of £348 million, and that is to be imposed on the rural areas

and the islands. Already in my constituency it costs an extra 5 per cent. to bring in goods by road. They are the reasons for a reduction in this tax.
I have received a letter from my former Member of Parliament, Lord Boothby. He said:
As you know, under the Parliament Act the House of Lords is not allowed to amend, or even to debate, the Finance Bill. But if you care to say in the constituency that I mentioned the subject and told you that if I had still been Member of Parliament for East Aberdeenshire I should have had no hesitation in voting against the increase in the oil duty, and that I entirely approve of what you are doing, you are welcome to do so.
If my right hon. and learned Friend the Chancellor cannot come to the Dispatch Box this evening and say that he will introduce an alternative to the 20p increase in the oil duty I shall follow the noble Lord's advice and vote against the measure.

Mr. Derek Foster: I am pleased to follow the hon. Member for Aberdeenshire, East (Mr. McQuarrie), but he will forgive me if, because of the time, I do not comment on his argument. We must admit that the Budget has been a tour de force of political calculation. The Chancellor of the Exchequer has succeeded in uniting against him the TUC, the CBI, half the Cabinet, all the Opposition parties and many of his hon. Friends He has produced one nation overnight. Never since the grim days of the blitz has the nation shown such unity of purpose. We are witnessing a Prime Minister and a Chancellor of truly Churchillian stature in their ability to mobilise the country. At last they have galvanised the entrepreneurs if only into a chorus of anger and despair.
The Conservative Party tricked its way into power in May 1979, promising to slash taxation, slash public expenditure by eliminating waste, yet maintaining public sector services. It promised to create an incentive society in an atmosphere wherein industry and enterprise could flourish. For the third successive Budget the Chancellor has increased the burden of taxation on the British public. After feverish attempts at reducing public expenditure, it is now a higher proportion of national output than it was under the Labour Government. It is 44½ per cent. this year and it will be 45 per cent. next year compared with only 41½ per cent. under Labour.
Manufacturing industry is "flourishing" to such an extent that is has lost 15 per cent. of its output since May 1979. That is the greatest slump in 60 years. One million people have lost their jobs. Yet it is expected that manufacturing industry will lose a further 6 per cent. of output in the next 12 months. An additional 300,000 to 500,000 people will lose their jobs because of the Budget. It is too late to prevent the relentless rise of unemployment beyond 3 million. Indeed, the Red Book assumes that unemployment will still be at 2·7 million, excluding school leavers, two years from now.
I was born in the North-East of England. My area has known high unemployment on and off for 60 years. I was unemployed myself for almost a year. My father was unemployed for two years in the 1930s and my father-in-law was unemployed for four years recently. The Chief Secretary represents a North-East constituency. He says that he needs no one to teach him about the vagaries of unemployment. Had he experienced prolonged unemployment himself or in his family, had he spent his life working amongst the deprived and disadvantaged, had he used all


the powers at his command to break into the cycle of despair in the urban areas of the North, he would not and could not pursue his present policies.
Harold Macmillan's experience at Stockton in the 1930s made him a radical Tory in his day—a soppy wet by today's standards. But the hard-faced men and women in the Cabinet have not had the burden of the low-paid and the unemployed seared upon their consciences by bitter experience. That is why they weep crocodile tears while turning the screw ever tighter. We have seen the rebirth of their nineteenth-century Jerusalem, and we want none of it. Let it be swept away on the tide of anger and despair summoned up by this Budget.
From the start, the medium-term financial strategy was misconceived and over-optimistic. The turnround in the finances of the nationalised industries was never achievable, even without the unforeseen severity of the depression. The targets for M3 and PSBR were impossibly tight, upon the admission of Professors Burns and Walters. Those over-tight targets resulted in high interest rates and the over-valued pound which, together with an inflation rate of 22 per cent., again caused largely by the doubling of VAT, were at the root of the 40 per cent. deterioration of British industry's competitiveness and the destocking of £3½ billion, the most unique feature of the depression.
Of course, the international recession has had an effect, but nowhere else in the Western world has manufacturing output slumped by 15 per cent. and nowhere else has unemployment increased by 65 per cent. The greater part of our recession has been self-inflicted and self-induced by the Government's misconceived policies. If the so-called "excessive wage claims" of "too powerful trade unions" have had an effect, again the Government are responsible, because they had a policy to deal with the problem: free collective bargaining and control of the money supply would do the trick. But they did not do the trick, except that mass unemployment and fear became this Government's economic policy. I warn the Government that the new realism will last only as long as mass unemployment.
At a time when British industry was pleading for respite, this half-dead sheep of a Chancellor, under orders from the Iron Shepherdess, has kicked his friends from the CBI in the teeth—no reduction in the national insurance surcharge, no reduction in the £8 a tonne fuel oil tax, no programme on capital reconstruction works, an increase in transport costs of 4 per cent., and a reduction in final demand for goods and services of some £3½ billion. A further loss of output and an increase in unemployment are inevitable. Unemployment is already costing us £8 billion. That is where our taxation is going. That is where the wealth of the North Sea is going.
In her fanatical crusade to save the country from the evils of Socialism, the Prime Minister is summoning up the forces of the extreme Left, determined to have done with tinkering with the system that has produced 3 million unemployed, eager to sweep away any vestige of the mixed economy, disillusioned with democracy itself. By her stridency and obstinacy, she gives succour to antidemocratic forces of the Lelft and the Right. In her muscular morality, she rewrites the Gospels and even recreates God in her own image, like some female weight lifter, leaping down from the cross and using it to hammer her opponents into the ground.
Let the right hon. Lady undermine her own support. Let her bring Prime Ministerial authority into disrepute. Few believe that it will last much longer. Inevitably, sooner rather than later, perhaps when further public expenditure cuts are attempted later this year, the revolt will come. Conservative Members, cruelly described as gutless and lacking in courage and moral fibre by their leader herself, will rise up in the realisation that only a change of policy will save the country and save themselves from electoral oblivion. The right course for them is to vote with us tonight, and to use their power to inflict an historic defeat upon this arrogant, autocratic and disastrous Government.

Mr. Robert Sheldon: We have heard a number of distinguished speeches today. Apart from the speech of my right hon. Friend the Member for Heywood and Royton (Mr. Barnett) and that of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), the right hon. Member for Chelmsford (Mr. St. JohnStevas) talked about the lack of demand in the economy, reminded us of the former Tory philosophy of one nation, and asked for help for industry. Bearing in mind the right hon. Gentleman's distinguished work in setting up the Select Committees, which will be remembered in this House long after many of the misdeeds of the Government are forgotten, we were right to pay him the attention we did.
The right hon. and learned Member for Hexham (Mr. Rippon) said that he did not believe that the Cabinet had not discussed these economic matters. "They must have done", he said. My view is that leaks usually prove correct; if so, it is reasonable also to assume that the Cabinet is showing its desire for greater participation in the government of the country. That does not seem a wholly unreasonable request.
Of course, when we used to run the Empire and fight various wars there were other matters to discuss than the economy. Now that our future is so largely tied up with the soluton of economic problems members of the Cabinet should be give opportunities to question the Chancellor of the Exchequer that are roughly equal to those afforded to journalists at press conferences, interviewers on television and members of the Select Committee on the Treasury and Civil Service.

Mr. Ioan Evans: Has my right hon. Friend seen the tape tonight? It says that the extensive leaks that appeared in The Sunday Times and The Observer on the Sunday before the Budget are to be the subject of an inquiry by the Prime Minister. My hon. Friend the Member for Oldham, West (Mr. Meacher) asked the right hon. Lady whether she would undertake such an inquiry and she has announced that she will. Is it not strange that she does not trust her Cabinet colleagues with the Budget information, yet there is now to be an inquiry into the information that appeared in the Sunday press?

Mr. Sheldon: My hon. Friend is right to draw attention to these matters. I hope that the inquiry will extend to the activities of a number of the staff at No. 10 Downing Street.
We know, of course, that in dealing with these matters in Cabinet the Treasury and the Prime Minister will arguue the need for secrecy. That argument is based upon the need to prevent the forestalling of decisions announced by the


Chancellor. If, for example, the tax on whisky is to be increased it is necessary to forestall people making a profit from it. But the world has moved on since the nineteenth century when those conventions were introduced. Two years ago value added tax was introduced from 8 per cent. to 15 per cent. That permitted open forestalling which was never before available. The furore over the VAT increase was not about the possibilities of forestalling, but rather about the extra tax that would be levied.
Lord Armstrong, one of our great civil servants, ex-Permanent Sercretary to the Treasury and former head of the Civil Service, urged, in a famous report, the need for proper discussion of taxation and public expenditure in December each year. In that report he said:
The risk that advance notice of some tax changes might lead to some forestalling should not be adequate excuse for secrecy.
Elsewhere in the report he said:
In other countries Budgets are commonly presented three months or more before they take effect.
Some consider that any Budget is a beautifully tuned instrument, and that if a screw is not in a precise position, or a nail is not driven into the right place, the Budget is condemned. I do not share that view. In 1977 the Government lost a vote on the Rooker-Wise amendment which deprived the then Chancellor of £1,000 million of his Budget judgment. The increase in petrol duty was changed by a decision of the House, asserting its right to control expenditure and revenue. Far from all the calamities which are predicted in such an eventuality, the Chancellor, the Treasury and the country were available to live with the consequences of those actions.
A Chancellor can come to live with any changes in the Budget strategy. His Budget judgment is based upon a large number of forces, and on many of those the House of Commons can hold a view that deserves as much respect
In this Budget, as in the preceding two, the Chancellor once more seeks to control the economy by the use of the money supply. We must ask ourselves one of the most interesting political questions of the day—how is it that a party that has been in power for the greater part of this century, which historically has moved from the status quo only reluctantly and which has never had a warm relationship with theorists on the fringes of their activities, came to be, first, so dominated by the theory of monetarism, and, secondly, so determined to put it into practice?
We know that the theory was developed for Latin American countries with high rates of inflation. Some of the ideas were imported into Britain in the 1960s. The domestic credit expansion accepted by Roy Jenkins, the Chancellor at that time, was one variation of monetarism. Inflation was increasing and the variable rates of inflation led to pressures on exchange rates and the break-up of the Bretton Woods system. Against, that background monetarism was introduced in Britain almost as a bacillus. All Governments are sceptical of new ideas and distrustful of economic fashions, although they incorporate, possibly for the sake for safety, a few of the newer elements of economic thought. However, such changes are normally limited, so monetarism made little headway.
That was the position up to the time of the U-turn by the Conservative Administration between 1970 and 1974. They worked for a prices and incomes policy and an arrangement with the trade unions as the only way to reach a solution for higher growth and control of inflation as they saw it. The miners' strike that brought that Government

to an end caused many Conservatives to examine how they had lost the battle against the miners. That began the search for alternative policies. In the months after 1974 the Conservatives who had been flirting with monetarism began to embrace it, and finally to revere it as the altar upon which all their new hopes would rest.
The Conservative Party knew that monetarism could be interpreted not only as a technique to control inflation but as an escape route that would avoid the necessity to negotiate with trade unions on matters of pay. What had burned into the souls of many Conservatives was that they had had to negotiate with trade unions, and that they had lost. With a policy of monetarism the employers, not the Government, would have to take on the trade unions, and the Government would be able to stand aside and watch the battle.
Direct and miserable involvement would be a thing of the past. The fixed and immutable money supply would bankrupt over-generous employers, and trade unions that obtained pay increases beyond the monetary guidelines would put their members' jobs at risk. The employers would be restrained and the employees threatened. Cash limits for the public service would limit the numbers of employees, and wage demands higher than the cash limits would result in redundancies and unemployment. That represented a brilliant economic and political solution for the Conservatives. It solved at a stroke the greatest problem facing them. Planning all that, they were almost berserk with joy. They felt that they had truly discovered the political philosopher's stone.
In a little noted debate on 13 March 1978 about the fiduciary issue, the theory reached the high water mark in a commitment by the present Financial Secretary to introduce a Bill designed to leave the money supply to the Bank of England, and for the Government to abdicate their responsibilities. All that was to ensure that the Government would be immune from unwelcome industrial and political pressures. Under this system the main levers of the economy would no longer reside at Westminster but in the City of London. The Conservative Opposition at that time, although they subsequently withdrew from this nonsense, maintained their general commitment to monetarism.
The Budget of 1979 gave the Government the first opportunity to implement their theories. So strongly held were the views of the practitioners of this theory that when VAT was increased in 1979 from 8 per cent. to 15 per cent. little long-term inflation was expected. It was said that, because the money supply was to be under control, inflation, too, would be under control. They drew a distinction between inflation and the retail price index. The RPI would increase temporarily, but long-term inflation would not be affected.
It was thought that the idea had only to be presented to the British people and employers and employees would comply with it and obey it because they would understand the imposed limits. The theory of expectation was blown sky high by the report of the Select Committee on the Treasury and Civil Service. If trade union negotiators ever heard of the theory, they certainly ignored it. It was clear that monetary targets had not influenced expectations.
The Chancellor of the Exchequer talked about his medium-term financial strategy in his Budget Statement on 26 March 1980. It is an astonishing document, which launched the decisive monetarist experiment. He said:


This strategy is by no means to be confused with a national plan.
He continued:
Opposition Members may laugh—for it is concerned with only those things— very few of them—that the Government actually have within their power to control."—[Official Report, 26 March 1980; Vol. 980, c. 1442–43.]
In a famous memorandum the Bank for International Settlements referred to the strategy as
akin to the experiments in the physical sciences.
That is what it was. The economy was to go on automatic pilot. Sterling M3 was to be fixed on a central range of targets year by year and would decrease from 9 per cent. to 8 per cent. to 7 per cent. to 6 per cent. year by year. It was not to be the subject of the vagaries of forecasts but was specified as an intention which it was within the Government's control to achieve.
We know what happened to that. The control of the money supply, which was to lead to a reduction in inflation, resulted in failure. The Select Committee on the Treasury and Civil Service made that clear. It stated:
We have not been convinced by evidence of a direct causal relationship from growth in the money supply to inflation.
In one respect the Government are fortunate that the monetary theory is nonsense. If it were not, because the Government were aiming for 9 per cent. growth and achieved 20 per cent., according to the outworn theory inflation should be rising at 20 per cent. in about two years. That is manifestly not happening.
I turn to personal allowances and the failure to revalorise them. The position of the Financial Secretary to the Treasury is extremely interesting. The right hon. Gentleman and I were members of the Standing Committee of 1977 that considered the then Finance Bill. The right hon. Gentleman moved with the Rooker-Wise duo and brought the then Conservative Opposition behind indexation. Perhaps the most remarkable fault of this astonishing Budget is the failure to index personal allowances. The Conservative Party has defended indexation with two main objects. The first is to spotlight the failures of all Governments to raise thresholds to meet the erosion caused by inflation. The second is to reduce taxation and so provide incentives, which Conservatives in Opposition claimed were lacking in the economy and represented the major difference between the two political parties.
In their first Budget in 1979, the Government reduced income tax and provided for a large reduction in the taxes of the better off and the higher income earners. That was the Tory Party acting in character and playing the role which we know well—giving big handouts to the better off in the guise of helping the average taxpayer. To support their actions and to help the better off, the Tories had a theory. It was not a recent innovation but an old encrusted theory. Those tax reductions were to improve incentives at all levels, although not all incentives would be equal. I was never firmly convinced of either the theory or the practice of those incentives.
However, whenever taxation for the well-to-do was eased to improve the economic performance of the well off—as when surtax levels were raised in 1962, when the tax system was unified in 1972 or when the higher rates were eased in 1979—it would need someone with the imagination of Professor Hayek to discern any consequential economic improvement.
However, let us assume that those improvements have taken place and that it is only our obtuseness or political prejudice which fail to recognise them. The Budget has increased income tax. Where is the argument about incentives now? Are people no longer expected to work as hard as they did in 1979 and 1980? Are entrepreneurs not expected to do so much entrepreneuring in the next year or so? Or is it argued that this is only a short interval before the onward progress of tax reductions is resumed and that by the next general election, those tax benefits will be restored? That was suggested by the Financial Secretary to the Treasury in his television broadcast yesterday.
The Chancellor of the Exchequer explains his borrowing difficulties in terms of cyclical problems, but I never understood the cyclical nature of incentives. The cycle is that allowances are increased just after an election and tax concessions are given just before an election, but neither is given in between. I do not comprehend the economic advantages of that.
However, I am beginning to get a glimmer of the political implications. As a result, we shall vote against Budget resolution No. 18, but we shall want to maintain the position of the blind. If we are fortunate enough to defeat the resolution, we shall put down an amendment in Committee to give the blind allowances which are in that resolution.
As has been said, it is generally understood that, although a high exchange rate, which has grievously damaged industry, makes exports more valuable and their achievement more difficult, it also makes imports cheaper. That is reflected in the cost of living. On a Treasury estimate, somewhere between three and five percentage points in inflation are reduced as a result of cheaper imports. Inflation is brought down directly as a result of those cheaper imports.
The only success to which the Government are able to lay claim is that of inflation several points less than they hoped to be able to achieve, but it is three points higher than when they came to office. It would have been several points higher still if it had not been for the high level of the pound resulting from sacrificing British industry on the foreign exchange markets of the world.
The Budget was expected to produce action to help industry. Help was expected for the decline in manufacturing output, which, according to the press notice issued today, is 15½ per cent. below the level for the same period a year ago. Over that time, unemployment has risen to 2½ million and manufacturing investment has fallen. Industry looked for emergency action. The Budget did nothing to that end. According to Sir Raymond Pennock, president of the CBI, the Budget will increase prices, bankruptcies and unemployment.
We should feel anxious about how much of British industry will be lost: how many good firms, particularly those that are viable and successful in normal circumstances, will be put out of business as a result of the Chancellor's actions? When economic health is restored, by whatever means, many firms will not be in existence to contribute to any future prosperity that we may hope to enjoy.
Millions of people are becoming bitter about conditions in the regions, which are not understood or not taken account of. We receive letters on many of these aspects.


I should like to read one from a lady, who, I believe, speaks for many in a similar position. Her husband was made redundant. She states:
From speaking to many people in this area, I feel we could have a revolt unless something is done to help the unemployed. My husband was made redundant after 22 years".
She then gives me details of his redundancy and his work.
However, the despair and heartache is written over the faces of the people in the North, because to take away a man's right to work and support his family takes away his pride.
There are also our youngsters, leaving school without hope for the future. No wonder a lot of them turn to crime. The jobcentre … has a board full of jobs at £23.50 a week for 40 hours. By anybody's standards, this is slave labour, and that was done away with years ago, or so we were led to believe.
The lady was clearly referring to the youth opportunities programme, but I telephoned the jobcentre. I found that two-thirds of the jobs were in that category. It is dispiriting for youngsters that hardly anything else is available. The difference between our regions will imperil the unity of the country in the way stated by the right hon. and learned Member for Hexham. Those are the problems we face.
When the Government's policies finally come to their ignoble halt and industry again starts to look ahead, where will the industrial capacity be? It has been undermined. Will firms not seek to restore their profit margins by increasing prices? Will not trade unionists seek to restore the standard of living of their members by making wage claims? If inflation then rises, what will our misery have achieved? It will merely show that the unwise application of inadequate theory is no way to determine our economic future.
What about the national insurance surcharge. It was almost with disbelief that I heard that nothing was to be done for industry, apart from the stock relief scheme and the small measures for small business. The Government have staked their all on the PSBR. We have a real problem, with 2½ million unemployed on the one hand and a demand for goods and products on the other. If the economic system that the Government are using fails to bring together those 2½ million unemployed and the need for advances in roads, railways, telecommunications and other aspects of our infrastructure which need to be improved or rectified, and if we cannot find a solution which brings those two things together, we must not be surprised if there are those who find more readily acceptable solutions.
To regard the PSBR as yet one more holy article to which we must yield is to fail completely to understand it. The Financial Statement shows that it is subject to great margins of error and that there are wide variations in what is expected and what can be achieved. It is all very well to talk about a £10½ billion PSBR, but there is a margin of error of £3½ billion, as shown in table 10 on page 28. So it is not £10½ billion, but something between £7 billion and £14 billion. How can it be said that we must have precision when the PSBR is set somewhere between £7 billion and £14 billion? If Conservative, or indeed Labour, Members suggest making it a billion or two more, that would make it between £8 billion and £15 billion or between £9 billion and £16 billion. We then see the nonsense of regarding the PSBR as yet one more holy article by which things are to be determined.
The Secretary of State for Trade described sterling M3 as a wayward mistress. By comparison with the PSBR, M3 is almost a vestal virgin. Certainly, it has not been subject to the wider discrepancies that we have seen in the PSBR. The PSBR is not just one type of spending; it contains a

whole range of expenditures. The right hon. Member for Taunton (Mr. Du Cann) drew attention to this early in the debate last week when he pointed out that current expenditure was going rapidly ahead of capital expenditure. If a higher PSBR is obtained as a result of expenditure on true investment articles such as telecommunications, railways and roads, we may be more relaxed about it. We do not need to have religious incantations about PSBR if a more relaxed PSBR takes unemployment effects into account.
The Government's first Budget was the consequence of their conviction that they understood the changes necessary to ring improvements through monetarism. They have failed completely in that regard. I am not sure how strong the Chancellor's commitment is to it. I know that today there are four lawyers and a journalist at the Treasury. I am not sure what the level of conviction among them is, or whether they are just producing the arguments demanded of them by the Prime Minister. The first Budget, at any rate, can be seen to have failed completely in its purpose, and the increase in VAT proved to be a disaster.
The Government's second Budget last year maintained their commitment to the same theory, but in greater detail. The third Budget of the same kind is a monument to the obstinacy of a Government who will not accept the facts that everyone else can see. Like many others, I expected the Government by now have changed their policies and to have brought about a U-turn. This was not because I thought that the Government were stupid or irresolute, but because I assumed that they were sensible and realistic and would in the end act sensibly and rationally in the interests of our people. I assumed that the Government would be limited by the boundaries of reality rather than only by the frontiers of their imagination.
The fear that is beginning to strike this House and the country is that that assumption may not be valid and that we may be facing an economic decline which will continue until the coming of the next Labour Government. I hope that for the sake of the country that will not be long.

The Chancellor of the Exchequer (Sir Geoffrey Howe): All those who have taken part in this necessarily wide-ranging debate have recognised, and indeed shared, the anxiety that must beset us when we are taking the central economic decisions for our economy at a time when every economy around the world is facing difficulty—[HON. MEMBERS: "Ah."]—and at a time when the difficulties in our own economy, under successive Governments, have been increased by the mounting cycle of inflation rising to higher levels, which in turn has taken unemployment to higher levels.
The tensions and difficulties were well illustrated by two characteristic speeches which highlighted very different points of view. On the one hand, there was the speech of the right hon. Member for Down, South (Mr. Powell), and on the other there was the equally characteristic but rather different speech of my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas)——

Mr. George Foulkes: What about Albert?

Sir Geoffrey Howe: —and the equally characteristic and forthright speech of my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie), which I shall deal with later.
The House was glad to welcome the contribution from my right hon. Friend the Member for Chelmsford and glad to notice that he had lost neither his fluency nor his sense of humour—[HON. MEMBERS: "Only his job."] The whole House joins in commiserating with him on that.
I am certain that the whole House understands and shares my right hon. Friend's respect for social issues. Every one of my right hon. and hon. Friends is every bit as concerned as he is with the maintenance of the fabric and social unity of this nation. I can well understand why he pointed out—there was no pretence about this, nor is there now—that we must all regard the rising level of unemployment as an issue of real moral concern to this nation. Labour Members have no monopoly in their concern for that. My right hon. and hon. Friends share every bit as much that concern for the level of unemployment in this country.

Mr. Shore: rose—

Sir Geoffrey Howe: Not yet.

Mr. Shore: rose—

Mr. Speaker: Order. It is quite clear that the Chancellor of the Exchequer is not giving way.

Sir Geoffrey Howe: I shall give the right hon. Member for Stepney and Poplar (Mr. Shore) his opportunity in a moment.
I wish to make it equally clear that the level of inflation in this country, which has been mounting under successive Governments, is equally, and just as importantly, an important moral issue for the fabric of this nation.
My right hon. Friend said that when we come to face those two issues—I understand what led him to say this—we do not have the choice and we are not entitled to make the choice between those two problems. In a sense he was right, because it must be the purpose of any responsible Government to conquer both. He was right also because the truth is that we cannot conquer unemployment if we are prepared to accept inflation. So our purpose is, as it must be, to maintain the fight against inflation, not by watching this or that statistic to the underexclusion of any other but as a crucial part of our fight to check the growth of unemployment.

Mr. Shore: If the right hon. and learned Gentleman wishes to be taken seriously in regard to his concern about unemployment, can he really not understand that the one certain way to bring about unemployment is to pile deflation upon deflation in the British economy? As he has managed to double the level of unemployment in two years, does he feel that he has any right to talk of his concern about unemployment? What figure does he expect unemployment to reach by the time the next Budget—which he will not present—is presented to this House?

Sir Geoffrey Howe: Our approach to this matter is founded very firmly upon the experience of the Government of whom the right hon. Member for Stepney and Poplar was a member—that reflation, so far from conquering unemployment, leads to accelerating inflation and rising unemployment. This country had to live through four years of that experience under the Labour

Government. They started off with a public sector borrowing requirement of about 6 per cent. They decided to reflate it and increase it and push it up to about 9 per cent.—the kind of figure they might want today.
What were the results of that reflationary approach to the economy? We had high and rising inflation, declining output—[Interruption]—and in just over two years after the Labour Government came to office, with the borrowing requirement rising in that way, unemployment had more than doubled and had risen by almost 1 million. That was under the labour Government. In addition, as a result of that approach—which they now seek to commend to us—there was an unprecedented loss of international confidence in the Government of this country. The pound fell to a level of $1·56. At the end of that experience, the former Prime Minister, the right hon. Member for Huyton (Sir H. Wilson), recognised the lesson that was to be drawn. He told the Labour Party conference—it is as true today as it was then—that we cannot spend our way into full employment.
It was in those circumstances that the Government resorted to the International Monetary Fund. Under the tutelage of the IMF, the Labour Government embarked on what some of their supporters described as the most savage expenditure cuts of all time. They reduced the borrowing requirement from 9¾ per cent. to 3¾ per cent., and respected economists of all kinds predicted disaster. Mr. Wynne Godley, just before the IMF measures were put into effect, warned that new measures to reduce the Budget deficit by a large amount would gravely accentuate the recession, and that there were no grounds for thinking that the resulting further increase in unemployment would be temporary.
But what happened? The Labour Government took the advice of the IMF and they were able to secure single figure inflation within two years. Growth began to return, and for the first time under that Government unemployment ceased to increase. Even that Government were able to recover a measure of international confidence. The whole experience of that Government—which I am glad to draw to the attention of the House in response to the question posed to me by the right hon. Gentleman—demonstrates the validity of the present Government's approach. Restraining borrowing and inflation is the proper way to return to growth and to reduce unemployment.

Mr. Bob Cryer: As the Chancellor has been explaining the position of the previous Labour Government, will he tell the House when he expects inflation to get back to where it stood in May 1979? Will he also tell us when he expects unemployment—which has just about doubled—to be at the level at which the Conservative Government inherited it? What will he say to the people of Keighley, who have experienced an increase in unemployment under the Tories of 150 per cent.? That is his responsibility.

Sir Geoffrey Howe: Conservative Members are as much concerned about the unemployed as anyone else. We can now point to the fact that the rate of inflation that we inherited, which was increasing when we came into office, is below that level and falling. For the first time, progress has been made in that direction. It is wrong to suggest—as some have argued today—that the Budget is too deflationary. It is important to consider the overall fiscal stance and to consider both sides of the account.
In public spending terms, we are spending £6 billion more next year in cash than was planned a year ago. Of course, part of that is due to the recession. It was right to allow the borrowing requirement to increase to take account of that. However, some part of that amount must be met by extra taxes. The borrowing requirement of £10·5 billion can hardly be described as restrictive. It is higher than was planned for last year and than was forecast in our strategy. We have allowed a substantial increase to take account of the recession.
Nobody could responsibly believe that we could possibly have accepted, or set out to finance, a borrowing requirement of £14 billion. Those who say that market interest rates have come down ahead of the Budget should recognise that interest rates have fallen only because the market anticipated the type of Budget that we have introduced. Let us consider what would have happened if the opposite course had been taken. Interest rates might have had to increase. Indeed, the hon. Member for Gateshead, West (Mr. Horam) told the House—I admire his candour—that if we had aimed, as he suggested, for a borrowing requirement that was £2 billion higher, it would have prevented the very reduction in interest rates that we have seen. In other words, it would have put at risk the strategy for defeating inflation. In the long run, that is our only hope of achieving sustainable growth and of reducing unemployment.
Ultimately, reflation only means inflation. Our policy is designed to sustain the fight against that evil. My right hon. Friend the Member for Chelmsford argued that by proceeding in this way—others made the same point—we were not doing as much as we should like to bring help to industry. There was no room and would be no room in a Budget introduced at this time for generalised tax relief for industry. The overriding need, which we set as our first objective, was to create the conditions that would permit lower interest rates for the bulk of industry. Of course, a case could he made—as the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) sought to do—for reducing the national insurance surcharge if there were money with which to do so. However, a single percentage point has a full-year cost of almost £¾ billion. In any event, my hon. Friends do not respond with much enthusiasm to an invitation to reduce the national insurance surcharge from the Labour Party. It was the Labour Party's invention. It raised the rate from zero to 3·5 per cent. at a time of high unemployment.

Mr. Geoffrey Robinson: Will the right hon. and learned Gentleman confirm that the manufacturing output figures that were published today show that in one year the Government have managed to reduce manufacturing output by nearly as much as it fell during the two worst years of the slump, namely 1929 and 1931? Does not the right hon. and learned Gentleman agree that that is a complete failure for his Government and a tragedy for this country?

Sir Geoffrey Howe: The hon. Gentleman's question summarises all too easily a fallacy that is too comforting. Of course, it is a matter for regret that manufacturing output is not rising. It is a delusion to believe that that is unique to this country or has been caused by, or is the responsibility of, the Government. [Interruption.] As the hon. Gentleman knows, precisely the same thing is happening in other countries. The House would deceive

itself if it were to believe that that situation can be transformed by a change of Government or by some rapid shift in economic policy.
We have been bringing help where it is most needed in an effective way. The two measures to help the construction industry are of real vlue. The stock relief proposals will cost almost £½ billion in a full year, bringing corresponding benefits to the whole of industry. The introduction of lower energy prices for large energy users costing over £100 million, will bring similar help.
Above all, the House is entitled to take note of the substantial reductions in the minimum lending rate achieved since last summer. The president of the CBI called during the autumn for a 4 per cent. reduction in the MLR. Now that monetary conditions can allow it, we have achieved precisely that 4 per cent. reduction. Each reduction point is worth about £350 million to the CBI, and the rates in interest payable by industry in Britain are lower than in Germany or the United States. That is real progress to the benefit of British industry.
A number of my right hon. and hon. Friends have expressed anxiety about the proposed tax on bank deposits. It is right to point out that I warned last year that I should be keeping bank profits under review. This is the third year of high profits. This high phase of bank profits has been brought on by the economic cycle and the high interest rates. There is a direct comparison between the oil companies profiting as they have been doing from recent conditions, and the banks. The contrast between the profits of the banks and manufacturing industry has become even starker. Relatively little tax has been paid on recent profits.
In the circumstances, I commend my proposal to the House. It is a special once and for all contribution. Having taken account of all the points made by my right hon. and hon. Friends, I do not believe that it can be regarded as unjustified or unexpected.

Mr. Budgen: Is my right hon. and learned Friend saying that the banks have not distributed their profits or that such a high proportion has been retained as to necessitate an attack?

Sir Geoffrey Howe: In the light of the total resources available to the banks, the tax that has been levied on their profits is well justified. No one could claim that it was unexpected. It is not possible to find a sensible alternative. This proposal will make a substantial contribution to the Government's capacity to bring help to British industry.
Some of my right hon. and hon. Friends have also expressed anxiety—I can well understand it—about the impact of the proposed increase in duty on petrol and den,. I recognise that that proposal will give rise to difficulties, particularly in rural areas. But it does and must make a crucial contribution to the revenue that comes from the indirect tax changes comes from that source—almost £1 billion from petrol alone. I have to ask the House, as the House must have been asking itself: how else could the revenue sensibly be raised? Putting 2p extra on beer would raise only £200 million and 5p on top of the large increase in the tax on cigarettes would raise less than £200 million.
My hon. Friend the Member for Aberdeenshire, East invited my attention to an increased tax on gambling. But one must have regard to the enforcement machinery that would be necessary to produce possibly only a modest increase from that direction. Only last year I restructured


the duties on gambling, particularly casinos, in the light of the Royal Commission's recommendations. I do not believe that it would be possible to look for anything like the amount that would be necessary in that quarter.

Mr. Eldon Griffiths: I support my right hon. and learned Friend's Budget judgment and admire his courage, but I should like to put to him a specific question the answer to which will certainly affect my vote and the votes of a number of my hon. Friends tonight. Between now and the Finance Bill, are the Government prepared to give consideration to reducing the petrol tax increase from 20p to 10p on the basis that alternative cuts in public expenditure and alternative additions to taxation would achieve precisely the same revenue consequence that my right hon. and learned Friend requires for his Budget as a whole?

Sir Geoffrey Howe: My hon. Friend would be proffering an illusion to the House if he thought that it was possible to go that way. I have considered very carefully, as have my right hon. Friends, all the alternative methods of raising this money. We have concluded that this is the right and the best course.
It is right to remind the House that, even after taking account of this proposed increase, the real price of petrol now will be no higher than it was after the last Budget, because there has been no other increase in price since then. It is also right to recognise that the total of tax per gallon of petrol, even after this change, will be lower than it was in real terms 11 years ago, and substantially lower than it was even at the end of 1974. There are still several European countries in which petrol is more expensive than it is here.
I know that this tax represents a heavy burden on those who dwell in the countryside. I shall certainly keep that fact well in mind. However, I remind the House that the levels which I propose for tax on petrol and diesel fuel are designed, as they must be, to raise a substantial revenue. They make a crucial contribution to the balance of the Budget and to the Budget as a whole. The decision on each individual measure depends on others being in place. I assure my hon. Friends that I should not be proposing and supporting this proposal if any acceptable alternative had been available to me.
One other matter was raised by a number of my hon. Friends—in particular, by my right hon. Friend the Member for Taunton (Mr. du Cann), my right hon. and learned Friend the Member for Hexham (Mr. Rippon), my right hon. Friends the Members for Chelmsford and for Farnham (Mr. Macmillan), and my hon. Friend the Member for Devizes (Mr. Morrison). They asked about the possibility of further investment in public sector activity, whether of a private or a public kind, with particular reference to major capital works. It must be recognised that to embark on investment just for the sake of it is not enough. Investment must offer the prospect of a real return. Even where that is available, it must still be financed. The question must still be looked at in the context of the overriding need to contain public expenditure—already higher than the Government would have wished.
It is also important to recognise that there is no answer to this in suggesting that investment can be undertaken sensibly through the nationalised industries, because in so

far as we stand behind the debts of those industries, their position is exactly the same. It is important to recognise that investment for capital purposes is more virtuous than expenditure for current purposes, but it must still be profitable and well directed.
There is the same choice even about investment in the nationalised industries, but there they have a choice, and if less is spent on pay, more is available for investment. The Government are not prepared to see more money borrowed or taxed from the private sector simply to shelter the nationalised industries from that fundamental choice.
Investment that is privately financed does not pose the same problem. As my right hon. Friend the Member for Farnham pointed out, that is the value of privatisation. It is the reason for the successive programmes of disposal that the present Government have undertaken, to the tune of £1 billion in the first year and almost £½ billion next year, and with a target of another £½ billion next year. That is a measure of the extent to which the burden is being transferred from the taxpayer to the private sector. It is notable that British Aerospace now has loan facilities of £400 million available. Had that remained in the public sector, those drawings would have counted against the public sector borrowing requirement. So, as my right hon. Friends pointed out, there is good reason for seeking other ways of attracting private capital short of complete privatisation, and I shall continue to search for propositions of that type.
The key conditions for such investment by private funds in major works of the kind that my hon. Friends have suggested is that the monetary consequences should be more beneficial than alternative forms of finance and that the methods of investment offer real pressure for improved performance on the management of the industry by establishing a proper link between the investment and the return to the investor. I assure the House that we are determined to make progress in that direction.
It will be all part of a piece with the proposals which many right hon. and hon. Members have commended in the way of the enterprise package: the many changes made in the last two Budgets, the reduction in corporation tax for small businesses, the new venture capital schemes, the changes in capital transfer taxes, the loan guarantee scheme, the small business start-up scheme and the small companies corporation tax changes once again this year—all those this year representing almost £100 million worth of help in a full year to small business, and widely welcomed not just by my hon. Friends but by representatives of small business and by Opposition Members. All those contrast completely with the attitude of the previous Administration. They offer a whole new framework in which businesses will now operate. This Government will do as they have been invited to do and make sure that they are fully exploited to the advantage of the economy.
The central challenge at the end of this Budget debate is a challenge to the right view of what it would be wise for this Government to borrow as they set out for the year ahead. In my judgment, it would be unwise and irresponsible for the Government to plan to borrow more than the figure I have suggested in the year ahead. Even that is a very substantial sum. Even that will add more than £1,000 million a year to the burden of debt interest in the years ahead.
I have taken account of the fact that the recession is still at work. I have taken account of the fact that the private


sector is likely to borrow less. But, even having done that, it would not be right for this Government to set out deliberately to overspend by more than £10½ million in the year ahead. The right hon. Member for Stepney and Poplar suggested that we could borrow a much larger sum than that harmlessly and without ill effects. That is wholly remote from the truth. A larger borrowing requirement than that would be a clear invitation—

Mr. Shore: rose——

Sir Geoffrey Howe: The borrowing requirement suggested by the right hon. Gentleman would be—

Mr. Shore: rose——

Mr. Speaker: Order. It is quite clear that the Chancellor of the Exchequer is not giving way to the right hon. Gentleman. The Chancellor must be allowed to continue.

Sir Geoffrey Howe: The right hon. Gentleman's approach would be an invitation for higher, not lower, interest rates. His approach would be a clear signal for prices to start rising again.

Mr. Shore: rose—

Sir Geoffrey Howe: I am sorry. I am not giving way.

Mr. Speaker: Order. We are approaching the end of the debate. Other right hon. and hon. Members have been allowed to speak without interruption.

Sir Geoffrey Howe: The plain fact is that the policy of the Labour Party is a prescription for higher interest rates, higher inflation and higher unemployment. We mean to secure the prospect of lower interest rates so that private enterprise may borrow to invest and prosper. We mean to drive home the advantage already won against inflation. Borrowing money to pay for current spending has been the "Rake's Progress" down the ages. Bankruptcy and worse have been the invariable fate of those nations which have let their borrowing run out of control. In recent years all our troubles have flowed from a disposition to borrow too much. It would be folly to run that risk again.
In my judgment, this Budget sets the borrowing objective that is consistent with prudence. Those who do not support it will be voting for higher interest rates, renewed inflation and faster decline. That would be folly indeed. I commend the Budget to the House.

Question put:—

The House divided: Ayes 325, Noes 270.

Division No. 99
[10 pm


AYES


Adley, Robert
Bennett, Sir Frederic (T'bay)


Aitken, Jonathan
Benyon, Thomas(A'don)


Alexander, Richard
Benyon, W. (Buckingham)


Alison, Michael
Best, Keith


Amery, Rt Hon Julian
Bevan, DavidGilroy


Ancram, Michael
Biffen, Rt Hon John


Arnold, Tom
Biggs-Davison, John


Aspinwall, Jack
Blackburn, John


Atkins, Rt Hon H. (S'thorne)
Blaker, Peter


Atkins, Robert (Preston)
Body, Richard


Atkinson, David (B'm'th, E)
Bonsor, SirNicholas


Baker, Kenneth (St. M'bone)
Boscawen, HonRobert


Baker, Nicholas (N Dorset)
Bottomley, Peter (W'wich W)


Banks, Robert
Bowden, Andrew


Beaumont-Dark, Anthony
Boyson, Dr Rhodes


Bell, Sir Ronald
Braine, Sir Bernard


Bendall, Vivian
Bright, Graham





Brittan, Leon
Grylls, Michael


Brooke, Hon Peter
Gummer, JohnSelwyn


Brotherton, Michael
Hamilton, Hon A.


Brown, Michael (Brigg&amp;Sc'n)
Hamilton, Michael (Salisbury)


Browne, John (Winchester)
Hampson, Dr Keith


Buchanan-Smith, Alick
Hannam, John


Buck, Antony
Haselhurst, Alan


Budgen, Nick
Hastings, Stephen


Bulmer, Esmond
Havers, Rt Hon Sir Michael


Burden, Sir Frederick
Hawkins, Paul


Butcher, John
Hawksley, Warren


Butler, Hon Adam
Hayhoe, Barney


Cadbury, Jocelyn
Heath, Rt Hon Edward


Carlisle, John (LutonWest)
Heddle, John


Carlisle, Kenneth(Lincoln)
Henderson, Barry


Carlisle, Rt Hon M. (R'c'n)
Heseltine, Rt Hon Michael


Chalker, Mrs. Lynda
Hicks, Robert


Channon, Rt. Hon. Paul
Higgins, Rt Hon Terence L.


Chapman, Sydney
Hill, James


Churchill, W. S.
Hogg, HonDouglas(Gr'tn'm)


Clark, Hon A. (Plym'th, S'n)
Holland, Philip(Carlton)


Clark, Sir W. (Croydon S)
Hooson, Tom


Clarke, Kenneth (Rushcliffe)
Hordern, Peter


Clegg, Sir Walter
Howe, Rt Hon Sir Geoffrey


Cockeram, Eric
Howell, Rt Hon D. (G'ldf'd)


Colvin, Michael
Howell, Ralph (N Norfolk)


Cope, John
Hunt, David (Wirral)


Corrie, John
Hunt, John (Ravensbourne)


Costain, Sir Albert
Hurd, HonDouglas


Cranborne, Viscount
Irving, Charles(Cheltenham)


Critchley, Julian
Jenkin, Rt Hon Patrick


Crouch, David
Jessel, Toby


Dean, Paul (NorthSomerset)
Johnson Smith, Geoffrey


Dickens, Geoffrey
Jopling, Rt Hon Michael


Dorrell, Stephen
Joseph, Rt Hon Sir Keith


Douglas-Hamilton, LordJ.
Kaberry, Sir Donald


Dover, Denshore
Kellett-Bowman, MrsElaine


du Cann, Rt Hon Edward
Kershaw, Anthony


Dunn, Robert (Dartford)
Kimball, Marcus


Durant, Tony
King, Rt Hon Tom


Eden, Rt Hon Sir John
Kitson, Sir Timothy


Edwards, Rt Hon N. (P'broke)
Lamont, Norman


Eggar, Tim
Lang, Ian


Elliott, Sir William
Langford-Holt, Sir John


Emery, Peter
Latham, Michael


Eyre, Reginald
Lawrence, Ivan


Fairbairn, Nicholas
Lawson, Rt Hon Nigel


Fairgrieve, Russell
Lee, John


Faith, MrsSheila
Lennox-Boyd, HonMark


Farr, John
Lester Jim (Beeston)


Fell, Anthony
Lewis, Kenneth (Rutland)


Fenner, Mrs Peggy
Lloyd, Ian (Havant&amp; W'loo)


Finsberg, Geoffrey
Lloyd, Peter (Fareham)


Fisher, Sir Nigel
Loveridge, John


Fletcher, A. (Ed'nb'gh N)
Luce, Richard


Fletcher-Cooke, Sir Charles
Lyell, Nicholas


Forman, Nigel
McCrindle, Robert


Fowler, Rt Hon Norman
Macfarlane, Neil


Fox, Marcus
MacGregor, John


Fraser, Rt Hon Sir Hugh
MacKay, John (Argyll)


Fraser, Peter (South Angus)
Macmillan, Rt Hon M.


Fry, Peter
McNair-Wilson, M. (N'bury)


Galbraith, HonT. G. D.
McNair-Wilson, P. (NewF'st)


Gardiner, George(Reigate)
McQuarrie, Albert


Gardner, Edward (S Fylde)
Madel, David


Garel-Jones, Tristan
Major, John


Gilmour, Rt HonSir Ian
Marland, Paul


Glyn, Dr Alan
Marlow, Tony


Goodhart, Philip
Marshall Michael (Arundel)


Goodhew, Victor
Marten, Neil (Banbury)


Goodlad, Alastair
Mates, Michael


Gorst, John
Mather, Carol


Gow, Ian
Maude, Rt Hon Sir Angus


Gower, Sir Raymond
Mawby, Ray


Grant, Anthony (Harrow C)
Mawhinney, Dr Brian


Gray, Hamish
Maxwell-Hyslop, Robin


Grieve, Percy
Mayhew, Patrick


Griffiths, E. (B'ySt. Edm'ds)
Mellor, David


Griffiths, Peter Port sm'th N)
Meyer, Sir Anthony


Grist, Ian
Miller, Hal(B'grove)






Mills, Iain(Meriden)
Shepherd, Richard


Mills, Peter (West Devon)
Shersby, Michael


Miscampbell, Norman
Silvester, Fred


Mitchell, David(Basingstoke)
Sims, Roger


Moate, Roger
Skeet, T. H. H.


Molyneaux, James
Smith, Dudley


Monro, Hector
Speed, Keith


Montgomery, Fergus
Speller, Tony


Moore, John
Spence,John


Morgan, Geraint
Spicer, Jim (West Dorset)


Morris, M. (N'hampton S)
Spicer, Michael (S Worcs)


Morrison, Hon C. (Devizes)
Sproat, Iain


Morrison, Hon P. (Chester)
Squire, Robin


Mudd, David
Stainton, Keith


Murphy, Christopher
Stanbrook, Ivor


Myles, David
Stanley, John


Neale, Gerrard
Steen, Anthony


Needham, Richard
Stevens, Martin


Nelson, Anthony
Stewart, Ian (Hitchin)


Neubert, Michael
Stewart, A. (E Renfrewshire)


Newton, Tony
Stokes, John


Normanton, Tom
Stradling Thomas, J.


Nott, Rt Hon John
Taylor, Robert (Croydon NW)


Onslow, Cranley
Taylor, Teddy (S'end E)


Oppenheim, Rt Hon Mrs S.
Tebbit, Norman


Page, Rt Hon Sir G. (Crosby)
Temple-Morris, Peter


Page, Richard (SW Herts)
Thatcher, Rt Hon Mrs M.


Parkinson, Cecil
Thomas, Rt Hon Peter


Parris, Matthew
Thompson, Donald


Patten, Christopher (Bath)
Thorne, Neil (Ilford South)


Patten, John(Oxford)
Thornton, Malcolm


Pattie, Geoffrey
Townend, John (Bridlington)


Pawsey, James
Townsend, Cyril D, (B'heath)


Percival, Sir Ian
Trippier, David


Peyton, Rt Hon John
Trotter, Neville


Pink, R. Bonner
van Straubenzee, W. R.


Pollock, Alexander
Vaughan, Dr Gerard


Porter, Barry
Viggers, Peter


Powell, Rt Hon J. E. (S Down)
Waddington, David


Prentice, Rt Hon Reg
Wakeham, John


Price, Sir David (Eastleigh)
Waldegrave, HonWilliam


Prior, Rt Hon James
Walker, Rt Hon P. (W'cester)


Proctor, K. Harvey
Walker, B. (Perth)


Pym, Rt Hon Francis
Walker-Smith, Rt Hon Sir D.


Raison, Timothy
Wall, Patrick


Rathbone, Tim
Waller, Gary


Rees, Peter (Dover and Deal)
Walters, Dennis


Rees-Davies, W. R.
Ward, John


Renton, Tim
Warren, Kenneth


Rhodes James, Robert
Watson, John


RhysWilliams, Sir Brandon
Wells, John (Maidstone)


Ridley, Hon Nicholas
Wells, Bowen


Ridsdale, Julian
Wheeler, John


Rifkind, Malcolm
Whitelaw, Rt Hon William


Rippon, Rt Hon Geoffrey
Whitney, Raymond


Roberts, M. (Cardiff NW)
Wickenden, Keith


Roberts, Wyn (Conway)
Wiggin, Jerry


Ross, Wm. (Londonderry)
Wilkinson, John


Rossi, Hugh
Willams, D. (Montgomery)


Rost, Peter
Winterton, Nicholas


Royle, Sir Anthony
Wolfson, Mark


Sainsbury, HonTimothy
Young, Sir George(Acton)


St. John-Stevas, Rt Hon N.
Younger, Rt Hon George


Scott, Nicholas



Shaw, Giles (Pudsey)
Tellers for the Ayes:


Shaw, Michael (Scarborough)
Mr. Spencer L. Marchant and Mr. Anthony Berry.


Shelton, William (Streatham)



Shepherd, Colin (Hereford)





NOES


Abse, Leo
Barnett, Guy(Greenwich)


Adams, Allen
Barnett, Rt Hon Joel (H'wd)


Allaun, Frank
Beith, A. J.


Alton, David
Benn, Rt Hon A. Wedgwood


Anderson, Donald
Bennett, Andrew(St'kp'tN)


Archer, Rt Hon Peter
Bidwell, Sydney


Ashley, Rt Hon Jack
Booth, Rt Hon Albert


Ashton, Joe
Boothroyd, MissBetty


Atkinson, N. (H'gey)
Bottomley, Rt Hon A. (M'b'ro)


Bagier, Gordon A. T.
Bradley, Tom





Bray, Dr Jeremy
Graham, Ted


Brocklebank-Fowler, C.
Grant, George (Morpeth)


Brown, Hugh D. (Provan)
Grant, John (Islington C)


Brown, R. C. (N'castle W)
Grimond, Rt Hon J.


Brown, Ron (E'burgh, Leith)
Hamilton, W. W. (C'tral Fife)


Brown, Ronald W. (H'ckn'yS)
Hardy, Peter


Callaghan, Rt Hon J.
Harrison, Rt Hon Walter


Callaghan, Jim (Midd't'n&amp; P)
Hart, Rt Hon Dame Judith


Campbell, Ian
Hattersley, Rt Hon Roy


Campbell-Savours, Dale
Haynes, Frank


Canavan, Dennis
Healey, Rt Hon Denis


Cant, R. B.
Heffer, Eric S.


Carmichael, Neil
Hogg, N. (E Dunb't'nshire)


Carter-Jones, Lewis
Holland, S. (L'b'th, Vauxh'll)


Cartwright, John
HomeRobertson, John


Clark, Dr David (S Shields)
Homewood, William


Cocks, Rt Hon M. (B'stol S)
Hooley, Frank


Cohen, Stanley
Horam, John


Coleman, Donald
Howell, Rt Hon D.


Concannon, Rt Hon J. D.
Howells, Geraint


Conlan, Bernard
Huckfield, Les


Cook, Robin F.
Hudson Davies, Gwilym E.


Cowans, Harry
Hughes, Mark (Durham)


Craigen, J. M.
Hughes, Robert (Aberdeen N)


Crawshaw, Richard
Hughes, Roy (Newport)


Crowther, J. S.
Janner, Hon Greville


Cryer, Bob
Jay, Rt Hon Douglas


Cunliffe, Lawrence
John, Brynmor


Cunningham, G. (Islington S)
Johnson, James (Hull West)


Cunningham, Dr J. (W'h'n)
Johnson, Walter (Derby S)


Dalyell, Tam
Johnston, Russell (Inverness)


Davidson, Arthur
Jones, Barry (East Flint)


Davies, Rt Hon Denzil (L'lli)
Jones, Dan (Burnley)


Davies, Ifor (Gower)
Kaufman, Rt Hon Gerald


Davis, Clinton (Hackney C)
Kerr, Russell


Davis, T. (B'ham, Stechf'd)
Kilroy-Silk, Robert


Deakins, Eric
Kinnock, Neil


Dempsey, James
Lambie, David


Dewar, Donald
Lamborn, Harry


Dixon, Donald
Lamond, James


Dobson, Frank
Leadbitter, Ted


Dormand, Jack
Leighton, Ronald


Douglas, Dick
Lestor, MissJoan


Douglas-Mann, Bruce
Lewis, Arthur (N'ham NW)


Dubs, Alfred
Lewis, Ron (Carlisle)


Duffy, A. E. P.
Litherland, Robert


Dunlop, John
Lofthouse, Geoffrey


Dunn, James A.
Lyon, Alexander (York)


Dunnett, Jack
Lyons, Edward (Bradf'dW)


Dunwoody, Hon Mrs G.
Mabon, Rt Hon Dr J. Dickson


Eadie, Alex
McCartney, Hugh


Eastham, Ken
McDonald, Dr Oonagh


Edwards, R. (W'hampt'n S E)
McGuire, Michael (Ince)


Ellis, R. (NED'bysh're)
McKay, Allen(Penistone)


Ellis,Tom (Wrexham)
McKelvey, William


English, Michael
MacKenzie, Rt Hon Gregor


Ennals, Rt Hon David
Maclennan, Robert


Evans, Ioan (Aberdare)
McMahon, Andrew


Evans, John (Newton)
McNamara, Kevin


Field, Frank
McTaggart, Robert


Fitch, Alan
Magee, Bryan


Fitt, Gerard
Marks, Kenneth


Flannery, Martin
Marshall, D (G'gowS'ton)


Fletcher, Raymond (Ilkeston)
Marshall, Dr Edmund (Goole)


Fletcher, Ted (Darlington)
Marshall, Jim (Leicester S)


Foot, Rt Hon Michael
Martin, M (G'gowS'burn)


Ford, Ben
Mason, Rt Hon Roy


Forrester, John
Maxton, John


Foster, Derek
Maynard, Miss Joan


Foulkes, George
Meacher, Michael


Fraser, J. (Lamb'th, N'w'd)
Mellish, Rt Hon Robert


Freeson, Rt Hon Reginald
Mikardo, Ian


Freud, Clement
Millan, Rt Hon Bruce


Garrett, John (NorwichS)
Miller, Dr M. S. (E Kilbride)


Garrett, W. E. (Wallsend)
Mitchell, Austin (Grimsby)


George, Bruce
Mitchell, R. C. (Soton Itchen)


Gilbert, Rt Hon Dr John
Morris, Rt Hon A. (W'shawe)


Ginsburg, David
Morris, Rt Hon J. (Aberavon)


Golding, John
Morton, George


Gourlay, Harry
Moyle, Rt Hon Roland






Mulley, Rt Hon Frederick
Sheerman, Barry


Newens, Stanley
Sheldon, Rt Hon R.


Oakes, Rt Hon Gordon
Shore, Rt Hon Peter


Ogden, Eric
Short, Mrs Renée


O'Halloran, Michael
Silkin, Rt Hon J. (Deptford)


O'Neill, Martin
Silkin, Rt Hon S. C. (Dulwich)


Orme, Rt Hon Stanley
Silverman, Julius


Owen, Rt Hon Dr David
Skinner, Dennis


Palmer, Arthur
Smith, Rt Hon J. (N Lanark)


Park, George
Snape, Peter


Parker, John
Soley, Clive


Pendry, Tom
Spearing, Nigel


Penhaligon, David
Spriggs, Leslie


Powell, Raymond (Ogmore)
Stallard, A. W.


Prescott, John
Steel, Rt Hon David


Race, Reg
Stewart, Rt Hon D. (W Isles)


Radice, Giles
Stoddart, David


Rees, Rt Hon M (Leeds S)
Stott, Roger


Richardson, Jo
Strang, Gavin


Robert s, Albert (Normanton)
Straw, Jack


Robert s, Allan(Bootle)
Summerskill, HonDr Shirley


Robert s, Gwilym (Cannok)
Taylor, Mrs Ann (Bolton W)


Robert son, George
Thomas, Datydd(Merioneth)


Robinson, G. (Coventry NW)
Thomas, Jeffrey (Abertillery)


Robinson, P. (Belfast E)
Thomas, Mike (Newcastle E)


Rodgers, Rt Hon William
Thomas, Dr R. (Carmarthen)


Rooker, J. W.
Thorne, Stan (PrestonSouth)


Roper, John
Tilley, John


Ross, Ernest (Dundee West)
Tinn, James


Ross, Stephen (Isle of Wight)
Torney, Tom


Rowlands, Ted
Urwin, Rt Hon Tom


Ryman, John
Varley, Rt Hon Eric G.


Sandelson, Neville
Wainwright, E. (DearneV)


Sever, John
Wainwright, R, (ColneV)





Walker, Rt Hon H. (D'caster)
Wilson, Gordon (Dundee E)


Watkins, David
Wilson, Rt HonSir H, (H'ton)


Weetch, Ken
Wilson, William (C'trySE)


Wellbeloved, James
Winnick, David


Welsh, Michael
Woodall, Alec


White, Frank R.
Woolmer, Kenneth


White, J. (G'gowPollok)
Wrigglesworth, Ian


Whitehead, Phillip
Wright, Sheila


Whitlock, William
Young, David (Bolton E)


Wigley, Dafydd



Willey, Rt Hon Frederick
Tellers for the Noes:


Williams, Rt Hon A, (S'sea W)
Mr. James Hamilton and Mr. Joseph Dean


Williams, Sir T. (W'ton)

Question accordingly agreed to.

Resolved,
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of—

(a) any amendment with respect to value added tax so as to provide—

(i) for zero-rating or exempting any supply;
(ii) for refunding any amount of tax;
(iii) for varying the rate of that tax otherwise than in relation to all supplies and importations; or
(iv) for any relief other than relief applying to goods of whatever description or services of whatever description; or
(b) any amendment relating to the surcharge imposed by the National Insurance Surcharge Act 1976 and applying to some only of the persons by or in respect of whom the surcharge is payable.

Orders of the Day — 2. SPIRITS

Motion made, and Question
That, as from 11 th March 1981, the rates of duty specified in section 5 of the Alcoholic Liquor Duties Act 1979 shall be increased from £11·87 and £11·90 per litre of alcohol in the spirits to £13·60 and £13·63 per litre of alcohol in the spirits respectively.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968. —[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions):—

The House divided: Ayes 324, Noes 253.

Division No. 100
[10 13 pm


AYES


Adley, Robert
Costain, Sir Albert


Aitken, Jonathan
Cranborne, Viscount


Alexander, Richard
Critchley, Julian


Alison, Michael
Crouch, David


Amery, Rt Hon Julian
Dean, Paul (NorthSomerset)


Ancram, Michael
Dickens, Geoffrey


Arnold, Tom
Dorrell, Stephen


Aspinwall, Jack
Douglas-Hamilton, LordJ.


Atkins, Rt HonH, (S'thorne)
Dover, Denshore


Atkins, Robert (PrestonN)
du Cann, Rt Hon Edward


Atkinson, David (B'm'th,E)
Dunn, Robert (Dartford)


Baker, Kenneth (St, M'bone)
Durant, Tony


Baker, Nicholas (NDorset)
Eden, Rt Hon Sir John


Banks, Robert
Edwards, Rt Hon N. (P'broke)


Beaumont-Dark, Anthony
Eggar, Tim


Bell, Sir Ronald
Elliott, Sir William


Bendall, Vivian
Emery, Peter


Bennett, Sir Frederic (T'bay)
Eyre, Reginald


Benyon, Thomas(A'don)
Fairbairn, Nicholas


Benyon, W. (Buckingham)
Fairgrieve, Russell


Best, Keith
Faith, Mrs Sheila


Bevan, David Gilroy
Farr, John


Biffen, Rt Hon John
Fell, Anthony


Biggs-Davison, John
Fenner, Mrs Peggy


Blackburn, John
Finsberg, Geoffrey


Blaker, Peter
Fisher, Sir Nigel


Body, Richard
Fletcher, A. (Ed'nb'ghN)


Bonsor, Sir Nicholas
Fletcher-Cooke, Sir Charles


Boscawen, HonRobert
Forman, Nigel


Bottomley, Peter (W'wichW)
Fowler, Rt Hon Norman


Bowden, Andrew
Fox, Marcus


Boyson, Dr Rhodes
Fraser, Rt Hon Sir Hugh


Braine, Sir Bernard
Fraser, Peter (South Angus)


Bright, Graham
Fry, Peter


Brittan, Leon
Galbraith, HonT. G. D.


Brooke, Hon Peter
Gardiner, George(Reigate)


Brotherton, Michael
Gardner, Edward (SFylde)


Brown, Michael (Brigg&amp;Sc'n)
Garel-Jones, Tristan


Browne, John(Winchester)
Gilmour, Rt Hon Sir Ian


Buchanan-Smith, Alick
Glyn, Dr Alan


Buck, Antony
Goodhart, Philip


Budgen, Nick
Goodhew, Victor


Bulmer, Esmond
Goodlad, Alastair


Burden, Sir Frederick
Gorst, John


Butcher, John
Gow, Ian


Butler, Hon Adam
Gower, Sir Raymond


Cadbury, Jocelyn
Grant, Anthony (HarrowC)


Carlisle, John (Luton West)
Gray, Hamish


Carlisle, Kenneth (Lincoln)
Grieve, Percy


Carlisle, Rt Hon M. (R'c'n)
Griffiths, E, (B'ySt. Edm'ds)


Chalker, Mrs. Lynda
Griffiths, Peter Port sm'thN)


Channon, Rt. Hon. Paul
Grist, Ian


Chapman, Sydney
Grylls, Michael


Churchill, W, S.
Gummer, JohnSelwyn


Clark, Hon A. (Plym'th, S'n)
Hamilton, Hon A.


Clark, Sir W. (Croydon S)
Hamilton, Michael (Salisbury)


Clarke, Kenneth(Rushcliffe)
Hampson, Dr Keith


Clegg, Sir Walter
Hannam, John


Cockeram, Eric
Haselhurst, Alan


Colvin, Michael
Hastings, Stephen


Cope, John
Havers, Rt Hon Sir Michael


Corrie, John
Hawkins, Paul




NOES


Abse, Leo
Dormand, Jack


Adams, Allen
Douglas, Dick


Allaun, Frank
Douglas-Mann, Bruce


Alton, David
Dubs, Alfred


Anderson, Donald
Duffy, A. E. P.


Archer, Rt Hon Peter
Dunlop, John


Ashley, Rt Hon Jack
Dunn, James A.


Ashton, Joe
Dunnett, Jack


Atkinson, H. (H'gey)
Dunwoody, Hon MrsG.


Bagier, Gordon A.T.
Eadie, Alex


Barnett, Guy (Greenwich)
Eastham, Ken


Bamett, Rt Hon Joel (H'wd)
Edwards, R. (W'hampt'n S E)


Beith, A, J.
Ellis,R. (NE D'bysh're)


Benn, Rt Hon A. Wedgwood
English, Michael


Bennett, Andrew(St'kp'tN)
Ennals, Rt Hon David


Bidwell, Sydney
Evans, loan (Aberdare)


Booth, Rt Hon Albert
Evans, John (Newton)


Booth royd, Miss Betty
Field, Frank


Bottomley, Rt HonA, (M'b'ro)
Fitch, Alan


Bray, Dr Jeremy
Fitt, Gerard


Brown, Hugh D. (Provan)
Flannery, Martin


Brown, R. C. (N'castle W)
Fletcher, Raymond (Ilkeston)


Brown, Ron (E'burgh, Leith)
Fletcher, Ted (Darlington)


Brown, Ronald W. (H'ckn'yS)
Foot, Rt Hon Michael


Caliaghan, Rt HonJ.
Ford, Ben


Callaghan, Jim (Midd't'n&amp;P)
Forrester, John


Campbell, Ian
Foster, Derek


Campbell-Savours, Dale
Foulkes, George


Canavan, Dennis
Fraser, J. (Lamb'th, N'w'd)


Cant, R. B.
Freeson, Rt Hon Reginald


Carmichael, Neil
Freud, Clement


Carter-Jones, Lewis
Garrett, John (NorwichS)


Clark, Dr David (S Shields)
Garrett, W. E. (Wallsend)


Cocks, Rt HonM. (B'stolS)
George, Bruce


Cohen, Stanley
Gilbert, Rt Hon Dr John


Coleman, Donald
Ginsburg, David


Concannon, Rt Hon J. D.
Golding, John


Conlan, Bernard
Gourlay, Harry


Cook, Robin F.
Graham, Ted


Cowans, Harry
G rant, George (Morpeth)


Craigen, J, M.
Grant, John (IslingtonC)


Crowther, J, S.
Grimond, Rt HonJ.


Cryer, Bob
Hamilton, W. W. (C'tral Fife)


Cunliffe, Lawrence
Hardy, Peter


Cunningham, G. (lslingtonS)
Harrison, Rt Hon Walter


Cunningham, Dr J. (W'h'n)
Hart, Rt Hon Dame Judith


Dalyell, Tam
Hattersley, Rt Hon Roy


Davidson, Arthur
Haynes, Frank


Davies, Rt Hon Denzil (L'lli)
Healey, Rt Hon Denis


Davies, Ifor (Gower)
Heffer, EricS.


Davis, Clinton (Hackney C)
Hogg, N. (EDunb't'nshire)


Davis, T. (B'ham, Stechf'd)
Holland,S. (L'b'th, Vauxh'll)


Deakins, Eric
HomeRobertson, John


Dempsey, James
Homewood, William


Dewar, Donald
Hooley, Frank


Dixon, Donald
Howell, Rt Hon D.


Dobson, Frank
Howells, Geraint

Hawksley, Warren
Morris, M. (N'hamptonS)


Hayhoe, Barney
Morrison, HonC. (Devizes)


Heath, Rt Hon Edward
Morrison, Hon P. (Chester)


Heddle, John
Mudd, David


Henderson, Barry
Murphy, Christopher


Heseltine, Rt Hon Michael
Myles, David


Hicks, Robert
Neale, Gerrard


Higgins, Rt Hon Terence L.
Needham, Richard


Hill, James
Nelson, Anthony


Hogg, HonDouglas (Gr'th'm)
Neubert, Michael


Holland, Philip(Carlton)
Newton, Tony


Hooson, Tom
Normanton, Tom


Hordern, Peter
Nott, Rt Hon John


Howe, Rt Hon Sir Geoffrey
Onslow, Cranley


Howell, Rt Hon D, (G'ldf'd)
Oppenheim, Rt Hon Mrs S.


Howell, Ralph (NNorfolk)
Page, Rt Hon Sir G. (Crosby)


Hunt, David (Wirral)
Page, Richard (SW Herts)


Hunt, John (Ravensbourne)
Parkinson, Cecil


Hurd, Hon Douglas
Parris, Matthew


Irving, Charles(Cheltenham)
Patten, Christopher (Bath)


Jenkin, Rt Hon Patrick
Patten, John (Oxford)


Jessel, Toby
Pattie, Geoffrey


JohnsonSmith, Geoffrey
Pawsey, James


Jopling, Rt Hon Michael
Percival, Sir Ian


Joseph, Rt Hon Sir Keith
Peyton, Rt Hon John


Kaberry, Sir Donald
Pink, R, Bonner


Kellett-Bowman, MrsElaine
Pollock, Alexander


Kershaw, Anthony
Porter, Barry


Kimball, Marcus
Prentice, Rt Hon Reg


King, Rt Hon Tom
Price, Sir David (Eastleigh)


Kitson, Sir Timothy
Prior, Rt Hon James


Knox, David
Proctor, K. Harvey


Lamont, Norman
Pym, Rt Hon Francis


Lang, Ian
Raison, Timothy


Langford-Holt, Sir John
Rathbone, Tim


Latham, Michael
Rees, Peter (Dover and Deal)


Lawrence, Ivan
Rees-Davies, W. R.


Lawson, Rt Hon Nigel
Renton, Tim


Lee, John
Rhodes James, Robert


Lennox-Boyd, HonMark
RhysWilliams, Sir Brandon


Lester Jim (Beeston)
Ridley, HonNicholas


Lewis, Kenneth (Rutland)
Ridsdale, Julian


Lloyd, Ian (Havant&amp; W'loo)
Rifkind, Malcolm


Lloyd, Peter (Fareham)
Rippon, Rt Hon Geoffrey


Loveridge, John
Robert s, M. (Cardiff NW)


Luce, Richard
Robert s, Wyn (Conway)


Lyell, Nicholas
Rossi, Hugh


McCrindle, Robert
Rost, Peter


Macfarlane, Neil
Royle, Sir Anthony


MacGregor, John
Sainsbury, HonTimothy


MacKay, John (Argyll)
St. John-Stevas, Rt Hon N.


Macmillan, Rt HonM.
Scott, Nicholas


McNair-Wilson, M. (N'bury)
Shaw, Giles (Pudsey)


McNair-Wilson, P. (NewF'st)
Shaw, Michael (Scarborough)


McQuarrie, Albert
Shelton, William(Streatham)


Madel, David
Shepherd, Colin(Hereford)


Major, John
Shepherd, Richard


Marland, Paul
Shersby, Michael


Marlow, Tony
Silvester, Fred


MarshallMichael(Arundel)
Sims, Roger


Marten, Neil(Banbury)
Skeet, T. H. H.


Mates, Michael
Smith, Dudley


Mather, Carol
Speed, Keith


Maude, Rt Hon Sir Angus
Speller, Tony


Mawby, Ray
Spence, John


Mawhinney, Dr Brian
Spicer, Jim (West Dorset)


Maxwell-Hyslop, Robin
Spicer, Michael (SWorcs)


Mayhew, Patrick
Sproat, Iain


Mellor, David
Squire, Robin


Meyer, Sir Anthony
Stainton, Keith


Miller, Hal(B'grove)
Stanbrook, Ivor


Mills, Iain (Meriden)
Stanley, John


Mills, Peter (West Devon)
Steen, Anthony


Miscampbell, Norman
Stevens, Martin


Mitchell, Davld (Basingstoke)
Stewart,Ian (Hitchin)


Moate, Roger
Stewart, A. (ERenfrewshire)


Monro, Hector
Stokes, John


Montgomery, Fergus
StradlingThomas, J.


Moore, John
Tapsell, Peter


Morgan, Geraint
Taylor, Robert(CroydonNW)

Taylor, Teddy (S'endE)
Waller, Gary


Tebbit, Norman
Walters, Dennis


Temple-Morris, Peter
Ward, John


Thatcher, Rt Hon Mrs M.
Warren, Kenneth


Thomas, Rt Hon Peter
Watson, John


Thompson, Donald
Wells, John (Maidstone)


Thorne, Neil (llfordSouth)
Wells, Bowen


Thornton, Malcolm
Wheeler, John


Townend, John (Bridlington)
Whitelaw, Rt HonWilliam


Townsend, CyrilD, (B'heath)
Whitney, Raymond


Trippier, David
Wickenden, Keith


Trotter, Neville
Wiggin, Jerry


van Straubenzee, W. R.
Wilkinson, John


Vaughan, Dr Gerard
Williams, D. (Montgomery)


Viggers, Peter
Winterton, Nicholas


Waddington, David
Wolfson, Mark


Wakeham, John
Young, Sir George (Acton)


Waldegrave, HonWilliam
Younger, Rt Hon George


Walker, Rt Hon P, (W'cester)



Walker, B. (Perth)
Tellers for the Ayes:


Walker-Smith, Rt Hon Sir D.
Mr. Spencer Le Marchant and Mr. Anthony Berry.


Wall, Patrick

Huckfield, Les
Prescott, John


Hudson Davies, Gwilym E.
Race, Reg


Hughes, Mark(Durham)
Radice, Giles


Hughes, Robert (AberdeenN)
Rees, Rt Hon M (Leeds S)


Hughes, Roy (Newport)
Richardson, Jo


Janner, HonGreville
Robert s, Albert (Normanton)


Jay, Rt Hon Douglas
Robert s, Allan(Bootle)


John, Brynmor
Robert s, Gwilym(Cannock)


Johnson, James (Hull West)
Robertson, George


Johnson, Walter (Derby S)
Robinson, G. (Coventry NW)


Johnston, Russell (Inverness)
Rooker, J. W.


Jones, Barry (East Flint)
Ross, Ernest (Dundee West)


Jones, Dan (Burnley)
Ross, Stephen (Isle of Wight)


Kaufman, Rt Hon Gerald
Rowlands, Ted


Kerr, Russell
Ryman, John


Kilroy-Silk, Robert
Sever, John


Kinnock, Neil
Sheerman, Barry


Lambie, David
Sheldon, Rt Hon R.


Lamborn, Harry
Shore, Rt Hon Peter


Lamond, James
Short, Mrs Renée


Leadbitter, Ted
Silkin, Rt Hon J. (Deptford)


Leighton, Ronald
Silkin, Rt Hon S. C. (Dulwich)


Lestor, MissJoan
Silverman, Julius


Lewis, Art hur (N'hamNW)
Skinner, Dennis


Lewis, Ron (Carlisle)
Smith, Rt Hon J. (N Lanark)


Litherland, Robert
Snape, Peter


Lofthouse, Geoffrey
Spearing, Nigel


Lyon, Alexander(York)
Spriggs, Leslie


Lyons, Edward (Bradf'dW)
Stallard, A. W.


Mabon, Rt Hon Dr J. Dickson
Steel, Rt Hon David


McCartney, Hugh
Stewart, Rt Hon D. (W Isles)


McDonald, Dr Oonagh
Stoddart, David


McGuire, Michael(Ince)
Stott, Roger


McKay, Allen (Penistone)
Strang, Gavin


McKelvey, William
Straw, Jack


MacKenzie, Rt HonGregor
Summerskill, HonDr Shirley


McMahon, Andrew
Taylor, Mrs Ann (Bolton W)


McNamara, Kevin
Thomas, Dafydd (Merioneth)


McTaggart, Robert
Thomas, Jeffrey (Abertillery)


Magee, Bryan
Thorne, Stan (PrestonSouth)


Marks, Kenneth
Tilley, John


Marshall, D(G'gowS'ton)
Tinn, James


Marshall, Dr Edmund (Goole)
Torney, Tom


Marshall, Jim (LeicesterS)
Urwin, Rt Hon Tom


Martin, M (G'gowS'burn)
Varley, Rt Hon Eric G.


Mason, Rt Hon Roy
Wainwright, E. (DearneV)


Maxton, John
Wainwright, R, (ColneV)


Maynard, MissJoan
Walker, Rt Hon H. (D'caster)


Meacher, Michael
Watkins, David


Mellish, Rt Hon Robert
Weetch, Ken


Mikardo, Ian
Wellbeloved, James


Millan, Rt Hon Bruce
Welsh, Michael


Miller, Dr M, S. (E Kilbride)
White, Frank R.


Mitchell, Austin (Grimsby)
White, J. (G'gowPollok)


Mitchell, R, C. (Soton Itchen)
Whitehead, Phillip


Morris, Rt Hon A. (W'shawe)
Whitlock, William


Morris, Rt HonJ. (Aberavon)
Willey, Rt Hon Frederick


Mort on, George
Williams, Rt Hon A, (S'sea W)


Moyle, Rt Hon Roland
Williams, Sir T. (W'ton)


Mulley, Rt Hon Frederick
Wilson, Gordon (Dundee E)


Newens, Stanley
Wilson, Rt Hon Sir H. (H'ton)


Oakes, Rt Hon Gordon
Wilson, William (C'trySE)


Ogden, Eric
Winnick, David


O'Halloran, Michael
Woodall, Alec


O'Neill, Martin
Woolmer, Kenneth


Orme, Rt Hon Stanley
Wright, Sheila


Palmer, Arthur
Young, David (Bolton E)


Park, George



Parker, John
Tellers for the Noes:


Pendry, Tom
Mr. James Hamilton and Mr. Joseph Dean.


Penhaligon, David



Powell, Raymond(Ogmore)

Question accordingly agreed to.

Orders of the Day — 3. BEER

That, as from 11th March 1981, the rates of duty specified in section in section 36 of the Alcoholic Liquor Duties Act 1979 shall be increased—

(a) from £13·05 for each hectolitre to £18.00 for each hectolitre;


the Crown are not paid at a rate which ensures—this seems tj
(b) from £0·435 for each additional degree of original gravity exceeding 1030 degrees to £0·60 for each such additional degree.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968. — [Sir Geoffrey Howe.]

Motion made, and Question put forthwith pursuant to Standing Order No. 94 (Ways and Means motions):—

The House divided: Ayes 324, Noes 253.

Division No. 101]
[10.25


AYES


Adley,Robert
Critchley,Julian


Aitken,Jonathan
Crouch,David


Alexander,Richard
Dean,Paul (North Somerset)


Alison,Michael
Dickens,Geoffrey


Amery, Rt Hon Julian
Dorrell, Stephen


Ancram,Michael
Douglas-Hamilton,LordJ.


Arnold,Tom
Dover,Denshore


Aspinwall,Jack
du Cann, Rt Hon Edward


Atkins, Rt Hon H. (S'thorne)
Dunn, Robert (Dartford)


Atkins,Robert (Preston)
Durant,Tony


Atkinson,David (B'm'th,E)
Eden, Rt Hon Sir John


Baker, Kenneth(St.M'bone)
Edwards, Rt Hon N. (P'broke)


Baker, Nicholas (N Dorset)
Eggar, Tim


Banks, Robert
Elliott, Sir William


Beaumont-Dark, Anthony
Emery, Peter


Bell, Sir Ronald
Eyre, Reginald


Bendall, Vivian
Fairbairn, Nicholas


Bennett, Sir Frederic (T'bay)
Fairgrieve, Russell


Benyon, Thomas (A'don)
Faith, MrsSheila


Benyon, W. (Buckingham)
Farr, John


Best, Keith
Fell, Anthony


Bevan, David Gilroy
Fenner, Mrs Peggy


Biffen, Rt Hon John
Finsberg, Geoffrey


Biggs-Davison, John
Fisher, Sir Nigel


Blackburn, John
Fletcher, A. (Ed'nb'gh N)


Blaker,Peter
Fletcher-Cooke, Sir Charles


Body,Richard
Forman,Nigel


Bonsor,Sir Nicholas
Fowler,Rt Hon Norman


Boscawen,Hon Robert
Fox,Marcus


Bottomley,Peter (W'wich W)
Fraser,Rt Hon Sir Hugh


Bowden,Andr ew
Fraser,Peter (SouthAngus)


Boyson,Dr Rhodes
Fry,Peter


Braine,Sir Bernard
Galbraith,HonT, G. D.


Bright, Graham
Gardiner, George(Reigate)


Brittan, Leon
Gardner, Edward (SFylde)


Brooke, Hon Peter
Garel-Jones, Tristan


Brothert on, Michael
Gilmour, Rt Hon Sir Ian


Brown, Michael(Brigg&amp;Sc'n)
Glyn, Dr Alan


Browne, John(Winchester)
Goodhart,Philip


Buchanan-Smith,Alick
Goodhew,Victor


Buck,Antony
Goodlad,Alastair


Budgen,Nick
Gorst,John


Bulmer,Esmond
Gow,Ian


Burden,Sir Frederick
Gower,Sir Raymond


Butcher, John
Grant,Anthony (HarrowC)


Butler,Hon Adam
Gray,Hamish


Cadbury,Jocelyn
Grieve,Percy


Carlisle,John (LutonWest)
Griffiths,E. (B'ySt.Edm'ds)


Carlisle, Kenneth (Lincoln)
Griffiths, Peter Portsm'thN)


Carlisle, Rt Hon M. (R'c'n)
Grist, Ian


Chalker, Mrs. Lynda
Grylls, Michael


Channon, Rt. Hon. Paul
Gummer, JohnSelwyn


Chapman, Sydney
Hamilton, HonA.


Churchill, W,S.
Hamilton, Michael(Salisbury)


Clark, Hon A.(Plym'th,S'n)
Hampson, Dr Keith


Clark, Sir W(Croydon S)
Hannam, John


Clarke, Kenneth(Rushcliffe)
Haselhurst, Alan


Clegg, Sir Walter
Hastings, Stephen


Cockeram, Eric
Havers, Rt Hon Sir Michael


Colvin, Michael
Hawkins, Paul


Cope, John
Hawksley, Warren


Corrie, John
Hayhoe, Barney


Costain, Sir Albert
Heath, Rt Hon Edward


Cranborne, Viscount
Heddle, John





Henderson, Barry
Murphy, Christopher


Heseltine, Rt Hon Michael
Myles, David


Hicks, Robert
Neale, Gerrard


Higgins, Rt Hon TerenceL.
Needham, Richard


Hill, James
Nelson, Anthony


Hogg, Hon Douglas(Gr'th'm)
Neubert, Michael


Holland, Philip(Carlton)
Newton, Tony


Hooson, Tom
Normanton, Tom


Hordern, Peter
Nott, Rt Hon John


Howe, Rt Hon Sir Geoffrey
Onslow, Cranley


Howell, Rt Hon D.(G'ldf'd)
Oppenheim, Rt Hon Mrs S.


Howell, Ralph(NNorfolk)
Page, Rt Hon Sir G.(Crosby)


Hunt, David(Wirral)
Page, Richard(SWHerts)


Hunt, John(Ravensbourne)
Parkinson, Cecil


Hurd, Hon Douglas
Parris, Matthew


Irving, Charles(Cheltenham)
Patten, Christopher(Bath)


Jenkin, Rt Hon Patrick
Patten, John(Oxford)


Jessel, Toby
Pattie, Geoffrey


JohnsonSmith, Geoffrey
Pawsey, James


Jopling, Rt Hon Michael
Percival, Sir Ian


Joseph, Rt Hon Sir Keith
Peyton, Rt Hon John


Kaberry, Sir Donald
Pink, R, Bonner


Kellett-Bowman, MrsElaine
Pollock, Alexander


Kershaw, Anthony
Porter, Barry


Kimball, Marcus
Prentice, Rt Hon Reg


King, Rt Hon Tom
Price, Sir David (Eastleigh)


Kitson, Sir Timothy
Prior, Rt Hon James


Knox, David
Proctor, K. Harvey


Lamont, Norman
Pym, Rt Hon Francis


Lang, Ian
Raison, Timothy


Langford-Holt, Sir John
Rathbone, Tim


Latham, Michael
Rees, Peter (Dover and Deal)


Lawrence, Ivan
Rees-Davies, W. R.


Lawson, Rt Hon Nigel
Renton, Tim


Lee, John
Rhodes James, Robert


Lennox-Boyd, HonMark
RhysWilliams, Sir Brandon


Lester Jim (Beeston)
Ridley, HonNicholas


Lewis, Kenneth (Rutland)
Ridsdale, Julian


Lloyd, Ian (HavantA W'loo)
Rifkind, Malcolm


Lloyd, Peter (Fareham)
Rippon, Rt Hon Geoffrey


Loveridge, John
Robert s, M. (Cardiff NW)


Luce, Richard
Robert s, Wyn (Conway)


Lyell, Nicholas
Rossi, Hugh


McCrindle, Robert
Rost, Peter


Macfarlane, Neil
Royle, Sir Anthony


MacGregor, John
Sainsbury, HonTimothy


MacKay, John (Argyll)
St. John-Stevas, Rt Hon N.


Macmillan, Rt Hon M.
Scott, Nicholas


McNair-Wilson, M. (N'bury)
Shaw, Giles (Pudsey)


McNair-Wilson, P. (NewF'st)
Shaw, Michael (Scarborough)


McQuarrie, Albert
Shelton, William(Streatham)


Madel, David
Shepherd, Colin(Hereford)


Major, John
Shepherd, Richard


Marland, Paul
Shersby, Michael


Marlow, Tony
Silvester, Fred


MarshallMichael(Arundel)
Sims, Roger


Marten, Neil (Banbury)
Skeet, T. H. H.


Mates, Michael
Smith, Dudley


Mather, Carol
Speed, Keith


Maude, Rt Hon Sir Angus
Speller, Tony


Mawby, Ray
Spence, John


Mawhinney, Dr Brian
Spicer, Jim (West Dorset)


Maxwell-Hyslop, Robin
Spicer, Michael (S Worcs)


May hew, Patrick
Sproat, Iain


Mellor, David
Squire, Robin


Meyer, Sir Anthony
Stainton, Keith


Miller, Hal(B'grove)
Stanbrook, Ivor


Mills, Iain(Meriden)
Stanley,John


Mills, Peter (West Devon)
Steen, Anthony


Miscampbell, Norman
Stevens, Martin


Mitchell, David (Basingstoke)
Stewart, Ian (Hitchin)


Moate, Roger
Stewart, A.(ERenfrewshire)


Monro, Hector
Stokes, John


Montgomery, Fergus
Stradling Thomas, J.


Moore, John
Tapsell, Peter


Morgan, Geraint
Taylor, Robert (Croydon NW)


Morris, M. (N'hamptonS)
Taylor, Teddy (S'end E)


Morrison, HonC. (Devizes)
Tebbit, Norman


Morrison, Hon P. (Chester)
Temple-Morris, Peter


Mudd, David
Thatcher, Rt Hon Mrs M.






Thomas, Rt Hon Peter
Ward, John


Thompson, Donald
Warren, Kenneth


Thome, Nei1 (IlfordSouth)
Watson, John


Thornton, Malcolm
Wells, John(Maidstone)


Townend, John(Bridlington)
Wells, Bowen


Townsend, CyrilD, (S'heath)
Wheeler, John


Trippier, David
Whitelaw, Rt HonWilliam


Trotter, Neville
Whitney, Raymond


van Straubenzee, W. R.
Wickenden, Keith


Vaughan, Dr Gerard
Wiggin, Jerry


Viggers, Peter
Wilkinson, John


Waddington, David
Williams, D. (Montgomery)


Wakeham, John
Winterton, Nicholas


Waldegrave, HonWilliam
Wolfson, Mark


Walker, Rt Hon P. (W'cester)
Young, Sir George (Acton)


Walker, B. (Pert h)
Younger, Rt Hon George


Walker-Smith, Rt Hon Sir D.



Wall, Patrick
Tellers for the Ayes:


Waller, Gary
Mr. Spencer Le Marchant and Mr. Anthony Berry.


Walters, Dennis





NOES


Abse, Leo
Dormand, Jack


Adams, Allen
Douglas, Dick


Allaun, Frank
Douglas-Mann, Bruce


Alton, David
Dubs, Alfred


Anderson, Donald
Duffy, A. E. P.


Archer, Rt Hon Peter
Dunn, James A.


Ashley, Rt Hon Jack
Dunnett, Jack


Ashton, Joe
Dunwoody, Hon Mrs G.


Atkinson, N.(H'gey)
Eadie, Alex


Bagier, GordonA, T.
Eastham, Ken


Bamett, Guy (Greenwich)
Edwards, R. (Whampt'n S E)


Barnett, Rt Hon Joel (H'wd)
Ellis, R, (NED'bysh're)


Beith, A, J.
English, Michael


Benn, Rt Hon A. Wedgwood
Ennals, Rt Hon David


Bennett, Andrew(St'kp'tN)
Evans, loan (Aberdare)


Bidwell, Sydney
Evans, John (Newton)


Booth, Rt Hon Albert
Field, Frank


Boothroyd, MissBetty
Fitch, Alan


Bottomley, Rt HonA. (M'b'ro)
Fitt, Gerard


Bray, Dr Jeremy
Flannery, Martin


Brown, HughD. (Provan)
Fletcher, Raymond (Ilkeston)


Brown, R. C. (N'castle W)
Fletcher, Ted (Darlington)


Brown, Ron (E'burgh, Leith)
Foot, Rt Hon Michael


Brown, Ronald W. (H'ckn'yS)
Ford, Ben


Callaghan, Rt Hon J.
Forrester, John


Callaghan, Jim (Midd't'n&amp;P)s
Foster, Derek


Campbell, Ian
Foulkes, George


Campbell-Savours, Dale
Fraser, J. (Lamb'th, N'w'd)


Canavan, Dennis
Freeson, Rt Hon Reginald


Cant, R. B.
Freud, Clement


Carmichael, Neil
Garrett, John (NorwichS)


Carter-Jones, Lewis
Garrett, W. E. (Wallsend)


Clark, Dr David (S Shields)
George, Bruce


Cocks, Rt Hon M. (B'stolS)
Gilbert, Rt Hon Dr John


Cohen, Stanley
Ginsburg, David


Coleman, Donald
Golding, John


Concannon, Rt Hon J. D.
Gourlay, Harry


Conlan, Bernard
Graham, Ted


Cook, Robin F.
Grant, George(Morpeth)


Cowans, Harry
Grant, John (IslingtonC)


Craigen, J. M.
Grimond, Rt HonJ.


Crowther, J. S.
Hamilton, W. W. (C'tral Fife)


Cryer, Bob
Hardy, Peter


Cunliffe, Lawrence
Harrison, Rt Hon Walter


Cunningham, G. (IslingtonS)
Hart, Rt Hon Dame Judith


Cunningham, Dr J. (W'h'n)
Hattersley, Rt Hon Roy


Dalyell, Tam
Haynes, Frank


Davidson, Arthur
Healey, Rt Hon Denis


Davies, Rt Hon Denzil (L'lli)
Heffer, Eric S.


Davies, Ifor (Gower)
Hogg, N. (EDunb't'nshire)


Davis, Clinton (HackneyC)
Holland, S, (L'b'th, Vauxh'll)


Davis, T. (B'ham, Stechf'd)
HomeRobertson, John


Deakins, Eric
Homewood, William


Dempsey, James
Hooley, Frank


Dewar, Donald
Howell, Rt HonD.


Dixon, Donald
Howells, Geraint


Dobson, Frank
Huckfield, Les





Hudson Davies, Gwilym E.
Race, Reg


Hughes, Mark (Durham)
Radice, Giles


Hughes, Robert (Aberdeen N)
Rees, Rt Hon M (Leeds S)


Hughes, Roy (Newport)
Richardson, Jo


Janner, HonGreville
Robert s, Albert (Normanton)


Jay, Rt Hon Douglas
Robert s, Gwilym(Cannock)


John, Brynmor
Robertson, George


Johnson, James (HullWest)
Robinson, G. (Coventry NW)


Johnson, Walter (Derby S)
Rooker, J, W.


Johnston, Russell(Inverness)
Ross, Ernest (Dundee West)


Jones, Barry (East Flint)
Ross, Stephen(Isle of Wight)


Jones, Dan (Burnley)
Rowlands, Ted


Kaufman, Rt Hon Gerald
Ryman, John


Kerr, Russell
Sever, John


Kilroy-Silk, Robert
Sheerman, Barry


Kinnock, Neil
Sheldon, Rt HonR.


Lambie, David
Shore, Rt Hon Peter


Lamborn, Harry
Short, Mrs Renée


Lamond, James
Silkin, Rt Hon J. (Deptford)


Leadbitter, Ted
Silkin, Rt Hon S. C. (Dulwich)


Leighton, Ronald
Silverman, Julius


Lestor, MissJoan
Skinner, Dennis


Lewis, Arthur (N'hamNW)
Smith, Rt Hon J. (N Lanark)


Lewis, Ron (Carlisle)
Snape, Peter


Litherland, Robert
Spearing, Nigel


Lofthouse, Geoffrey
Spriggs, Leslie


Lyon, Alexander (York)
Stallard, A. W.


Lyons, Edward (Bradf'dW)
Steel, Rt Hon David


Mabon, Rt Hon Dr J. Dickson
Stewart, Rt Hon D. (W Isles)


McCartney, Hugh
Stoddart, David


McDonald, Dr Oonagh
Stott, Roger


McGuire, Michael (Ince)
Strang, Gavin


McKay, Allen(Penistone)
Straw, Jack


McKelvey, William
Summerskill, HonDr Shirley


MacKenzie, Rt Hon Gregor
Taylor, Mrs Ann (Bolton W)


McMahon, Andrew
Thomas, Dafydd (Merioneth)


McNamara, Kevin
Thomas, Jeffrey(Abertillery)


McTaggart, Robert
Thomas, Dr R. (Carmarthen)


Magee, Bryan
Thorne, Stan (Preston South)


Marks, Kenneth
Tilley, John


Marshall, D (G'gowS'ton)
Tinn, James


Marshall, Dr Edmund (Goole)
Torney, Tom


Marshall, Jim (LeicesterS)
Urwin, Rt Hon Tom


Martin,M (G'gowS'burn)
Varley, Rt Hon Eric G.


Mason, Rt Hon Roy
Wainwright, E. (DearneV)


Maxton, John
Wainwright, R. (ConelV)


Maynard, MissJoan
Walker, Rt Hon H. (D'caster)


Meacher, Michael
Watkins, David


Mellish, Rt Hon Robert
Weetch, Ken


Mikardo, Ian
Wellbeloved, James


Millan, Rt Hon Bruce
Welsh, Michael


Miller, Dr M, S. (E Kilbride)
White, Frank R.


Mitchell, Austin(Grimsby)
White, J. (G'gowPollok)


Mitchell, R. C. (Soton Itchen)
Whitehead, Phillip


Morris, Rt Hon A. (W'shawe)
Whitlock, William


Morris, Rt Hon J. (Aberavon)
Wigley, Dafydd


Morton, George
Willey, Rt Hon Frederick


Moyle, Rt Hon Roland
Williams, Rt Hon A. (S'sea W)


Mulley, Rt Hon Frederick
Williams, Sir T, fW'forV


Newens, Stanley
Wilson, Gordon (DundeeE)


Oakes, Rt Hon Gordon
Wilson, Rt Hon Sir H. (H'ton)


Ogden, Eric
Wilson, William (C'trySE)


O'Halloran, Michael
Winnick, David


O'Neill, Martin
Woodall, Alec


Orme, Rt Hon Stanley
Woolmer, Kenneth


Palmer, Arthur
Wright, Sheila


Park, George
Young, David (Bolton E)


Parker, John



Pendry, Tom
Tellers for the Noes:


Penhaligon, David
Mr. James Hamilton and Mr. Joseph Dean.


Powell, Raymond(Ogmore)



Prescott, John

Question accordingly agreed to.

Orders of the Day — 4. WINE

Motion made, and Question,
That, as from 11th March 1981, the rates of duty under section 54 of the Alcoholic Liquor Duties Act 1979 shall be as follows:




Description of wine
Rates of duty per hectolitre



£


Wine of a strength—



not exceeding 15 per cent. … … … … … …
95·20


exceeding 15 but not exceeding 18 per cent. … …
122·90


exceeding 18 but not exceeding 22 per cent. … …
144·70


exceeding 22 per cent. … … … … … … …
144·70 plus



£13·60 for every 1 per cent, or part of 1 per cent, in excess of 22 per cent.;



each of the above rates of duty being, in the case of sparkling wine, increased by £20·90 per hectolitre.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.——[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Description of made-wine
Rates of duty per hectolitre


£
Made-wine of a strength—


not exceeding 10 per cent. … … … … … …
61·80


exceeding 10 but not exceeding 15 per cent. … …
92·50


exceeding 15 but not exceeding 18 per cent. … …
113·90


exceeding 18 per cent. … … … … … … …
113·90 plus



£13·60 for every 1 per cent, or part of 1 per cent, in excess of 18 percent.;



each of the above rates of duty being, in the case of sparkling made-wine, increased by £9·60 per hectolitre.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 6. CIDER

Motion made, and Question,
That, as from 11th March 1981, the rate of duty specified in section 62(1) of the Alcoholic Liquor Duties Act 1979 shall be increased from £6.05 per hectolitre to £7·20 per hectolitre.

TABLE


1. Cigarettes… … … … … … … …
…An amount equal to 21 per cent, of the retail price plus £18·04 per thousand cigarettes.


2. Cigars … … … … … … … …
…£34·29 per kilogram.


3. Hand-rolling tobacco … … … … …
…£29·56 per kilogram.


4. Other smoking tobacco and chewing tobacco
…£21·92 per kilogram."

(2) Section 3 (additional duty on higher tar cigarettes) shall be omitted.

Orders of the Day — 5. MADE-WINE

Motion made, and Question,
That, as from 11th March 1981, the rates of duty under section 55 of the Alcoholic Liquor Duties Act 1979 shall be as follows:

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.m—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 7. TOBACCO PRODUCTS

Motion made, and Question,
That, as from 14th March 1981, the Tobacco Products Duty Act 1979 shall be amended as follows—

(1) For the Table in Schedule 1 there shall be substituted—

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No.94 (Ways and Means motions):—

The House divided: Ayes 329, Noes 229.

Division No. 102]
[10.35 pm


AYES


Adley,Robert
Douglas-Hamilton,LordJ.


Aitken,Jonathan
Dover,Denshore


Alexander,Richard
du Cann, Rt Hon Edward


Alison,Michael
Dunn,Robert(Dartford)


Amery, RtHonJulian
Durant,Tony


Ancram, Michael
Eden, RtHon Sir John


Arnold,Tom
Edwards, Rt Hon N. (P'broke)


Aspinwall,Jack
Eggar,Tim


Atkins, RtHon H .(S'thorne)
Elliott, SirWilliam


Atkins,Robert(PrestonN)
Emery, Peter


Atkinson, David (B'm'th.E)
Eyre,Reginald


Baker.Kenneth(St.M'bone)
Fairbairn,Nicholas


Baker, Nicholas (N Dorset)
Fairgrieve,Russell


Banks,Robert
Faith, MrsSheila


Beaumont-Dark,Anthony
Farr,John


Beith.A.J.
Fenner, Mrs Peggy


Bell,SirRonald
Finsberg,Geoffrey


Bendall, Vivian
Fisher, Sir Nigel


Bennett, Sir Frederic (T'bay)
Fletcher.A. (Ed'nb'ghN)


Benyon,Thomas(A'don)
Fletcher-Cooke,SirCharles


Benyon, W. (Buckingham)
Forman,Nigel


Best, Keith
Fowler, Rt Hon Norman


Bevan, David Gilroy
Fox, Marcus


Biffen, RtHon John
Fraser, Rt Hon Sir Hugh


Biggs-Davison,John
Fraser, Peter (South Angus)


Blackburn,John
Freud,Clement


Blaker, Peter
Fry, Peter


Body,Richard
Galbraith, Hon T. G. D.


Bonsor,SirNicholas
Gardiner,George (Reigate)


Boscawen, Hon Robert
Gardner, Edward (SFylde)


Bottomley, Peter (W'wich W)
Garel-Jones, Tristan


Bowden, Andrew
Gilmour, Rt Hon Sir Ian


Boyson, Dr Rhodes
Glyn, Dr Alan


Braine, Sir Bernard
Goodhart, Philip


Bcenter, Graham
Goodhew, Victor


Brittan, Leon
Goodlad, Alastair


Brooke, Hon Peter
Gorst, John


Brotherton, Michael
Gow, Ian


Brown, Michael(Brigg&amp;Sc'n)
Gower, Sir Raymond


Browne, John(Winchester)
Grant, Anthony (Harrow C)


Buchanan-Smith, Alick
Gray, Hamish


Buck, Antony
Grieve, Percy


Budgen, Nick
Griffiths, E. (B'ySt. Edm 'ds)


Bulmer, Esmond
Griffiths, Peter Portsm'thN)


Burden, Sir Frederick
Grist, Ian


Butcher, John
Grylls, Michael


Butler, Hon Adam
Gummer, John Selwyn


Cadbury, Jocelyn
Hamilton, Hon A.


Carlisle, John (Luton West)
Hamilton, Michael (Salisbury)


Carlisle, Kenneth(Lincoln)
Hampson, Dr Keith


Carlisle, Rt Hon M. (R'c'n)
Hannam, John


Chalker, Mrs. Lynda
Haselhurst, Alan


Channon, Rt. Hon. Paul
Hastings, Stephen


Chapman, Sydney
Havers, Rt Hon Sir Michael


Churchill, W, S.
Hawkins, Paul


Clark, Hon A. (Plym'th, S'n)
Hawksley, Warren


Clark, Sir W. (Croydon S)
Hayhoe, Barney


Clarke, Kenneth(Rushcliffe)
Heath, Rt Hon Edward


Clegg, Sir Walter
Heddle, John


Cockeram, Eric
Henderson, Barry


Colvin, Michael
Heseltine, Rt Hon Michael


Cope, John
Hicks, Robert


Corrie, John
Higgins, Rt Hon Terence L.


Costain, Sir Albert
Hill, James


Cranborne, Viscount
Hogg, Hon Douglas(Gr'th'm)


Critchley, Julian
Holland, Philip(Carlton)


Crouch, David
Hooson, Tom


Dean, Paul (North Somerset)
Hordern, Peter


Dickens, Geoffrey
Howe, Rt Hon Sir Geoffrey


Dorrell, Stephen
Howell, Rt Hon D, (G'Idf'd)




NOES


Abse, Leo
Edwards, R. (W'hampt'n S E)


Adams, Allen
Ellis, R. (NED'bysh're)


Allaun, Frank
English, Michael


Alton, David
Evans, Ioan (Aberdare)


Archer, Rt Hon Peter
Evans, John (Newton)


Ashley, Rt Hon Jack
Field, Frank


Ashton, Joe
Fitch, Alan


Atkinson, N.(H'gey)
Fitt, Gerard


Bagier, Gordon A, T.
Flannery, Martin


Barnett, Guy(Greenwhich)
Fletcher, Raymond (Ilkeston)


Barnett, Rt Hon Joel (H'wd)
Fletcher, Ted (Darlington)


Benn, Rt Hon A. Wedgwood
Foot, Rt Hon Michael


Bidwell, Sydney
Ford, Ben


Booth, Rt Hon Albert
Forrester, John


Boothroyd, MissBetty
Foster, Derek


Bottomley, Rt Hon A.(M'b'ro)
Fraser, J. (Lamb'th, N'w'd)


Bray, Dr Jeremy
Freeson, Rt Hon Reginald


Brown, Hugh D. (Provan)
Garrett, John (NorwichS)


Brown, R. C. (N'castle W)
Garrett, W. E. (Wallsend)


Brown, Ron (E'burgh, Leith)
George, Bruce


Brown, Ronald W. (H'ckn'yS)
Gilbert, Rt Hon Dr John


Callaghan, Rt Hon J.
Golding, John


Callaghan, Jim(Midd't'n&amp;P)
Gourlay, Harry


Campbell, Ian
Graham, fed


Campbell-Savours, Dale
Grant, George(Morpeth)


Canavan, Dennis
Grant, John (Islington C)


Cant, R. B.
Hamilton, W. W. (C'tral Fife)


Carmichael, Neil
Hardy, Peter


Carter-Jones, Lewis
Harrison, Rt Hon Walter


Clark, Dr David (S Shields)
Hart, Rt Hon DameJudith


Cocks, Rt Hon M. (B'stolS)
Hattersley, Rt Hon Roy


Cohen, Stanley
Haynes, Frank


Coleman, Donald
Healey, Rt Hon Denis


Concannon, Rt Hon J. D.
Heffer, Eric S.


Conlan, Bernard
Hogg, N. (EDunb't'nshire)


Cook, Robin F.
Holland, S.(L'b'th, Vauxh'll)


Cowans, Harry
Homewood, William


Craigen, J. M.
Howell, Rt Hon D.


Crowther, J, S.
Howells, Geraint


Cryer, Bob
Huckfield, Les


Cunliffe, Lawrence
Hudson Davies, Gwilym E.


Cunningham, G. (IslingtonS)
Hughes, Mark(Durham)


Cunningham, Dr J. (W'h'n)
Hughes, Robert (Aberdeen N)


Dalyell, Tam
Janner, Hon Greville


Davidson, Arthur
Jay, Rt Hon Douglas


Davies, Rt Hon Denzil (L'lli)
John, Brynmor


Davies, Ifor (Gower)
Johnson, James (Hull West)


Davis, CIinton (Hackney C)
Johnson, Walter (DerbyS)


Davis, T. (B'ham, Stechf'd)
Jones, Barry (East Flint)


Dempsey, James
Jones, Dan (Burnley)


Dewar, Donald
Kaufman, Rt Hon Gerald


Dixon, Donald
Kerr, Russell


Dobson, Frank
Kilroy-Silk, Robert


Dormand, Jack
Kinnock, Neil


Douglas, Dick
Lambie, David


Douglas-Mann, Bruce
Lamborn, Harry


Duffy, A. E. P.
Lamond, James


Dunn, James A.
Leadbitter, Ted


Dunnett, Jack
Leighton, Ronald


Eadie, Alex
Lestor, MissJoan


Eastham, Ken
Lewis, Arthur (N'ham NW)

Howell, Ralph (NNorfolk)
Oppenheim, Rt Hon Mrs S.


Hunt, David (Wirral)
Page, Rt Hon Sir G. (Crosby)


Hunt, John(Ravensbourne)
Page, Richard (SW Herts)


Hurd, Hon Douglas
Parkinson, Cecil


Irving, Charles (Cheltenham)
Parris, Matthew


Jenkin, Rt Hon Patrick
Patten, Christopher(Bath)


Jessel, Toby
Patten, John(Oxford)


Johnson Smith, Geoffrey
Pattie, Geoffrey


Johnston, Russell(Inverness)
Pawsey, James


Jopling, Rt Hon Michael
Penhaligon, David


Joseph, Rt Hon Sir Keith
Percival, Sir Ian


Kaberry, Sir Donald
Peyton, Rt Hon John


Kellett-Bowman, MrsElaine
Pink, R, Bonner


Kershaw, Anthony
Pollock, Alexander


Kimball, Marcus
Porter, Barry


King, Rt Hon Tom
Prentice, Rt Hon Reg


Kitson, Sir Timothy
Price, Sir David(Eastleigh)


Knox, David
Prior, Rt Hon James


Lamont, Norman
Proctor, K. Harvey


Lang, Ian
Pym, Rt Hon Francis


Langford-Holt, Sir John
Raison, Timothy


Latham, Michael
Rathbone, Tim


Lawrence, Ivan
Rees, Peter (Dover and Deal)


Lawson, Rt Hon Nigel
Rees-Davies, W. R.


Lee, John
Renton, Tim


Lennox-Boyd, Hon Mark
Rhodes James, Robert


Lester Jim (Beeston)
Rhys Williams, Sir Brandon


Lewis, Kenneth(Rutland)
Ridley, Hon Nicholas


Lloyd, Ian (Havant&amp; W'loo)
Ridsdale, Julian


Lloyd, Peter (Fareham)
Rifkind, Malcolm


Loveridge, John
Rippon, Rt Hon Geoffrey


Luce, Richard
Roberts, M. (Cardiff NW)


Lyell, Nicholas
Roberts, Wyn (Conway)


McCrindle, Robert
Ross, Stephen (Isle of Wight)


Macfarlane, Neil
Rossi, Hugh


MacGregor, John
Rost, Peter


MacKay, John (Argyll)
Royle, Sir Anthon y


Macmillan, Rt Hon M.
Sainsbury, Hon Timothy


McNair-Wilson, M.(N'bury)
St. John-Stevas, Rt Hon N.


McNair-Wilson, P. (NewF'st)
Scott, Nicholas


McQuarrie, Albert
Shaw, Giles (Pudsey)


Madel, David
Shaw, Michael(Scarborough)


Major, John
Shelton, William(Streatham)


Marland, Paul
Shepherd, Colin(Hereford)


Marlow, Tony
Shepherd, Richard


MarshallMichael(Arundel)
Shersby, Michael


Marten, Neil(Banbury)
Silvester, Fred


Mates, Michael
Sims, Roger


Mather, Carol
Skeet, T. H. H.


Maude, Rt Hon Sir Angus
Smith, Dudley


Mawby, Ray
Speed, Keith


Mawhinney, Dr Brian
Speller, Tony


Maxwell-Hyslop, Robin
Spence, John


Mayhew, Patrick
Spicer, Jim (West Dorset)


Mellor, David
Spicer, Michael (SWorcs)


Meyer, Sir Anthony
Sproat, Iain


Miller, Hal(B'grove)
Squire, Robin


Mills, Iain(Meriden)
Stainton, Keith


Mills, Peter (WestDevon)
Stanbrook, Ivor


MiscampbelI, Norman
Stanley, John


Mitchell, David (Basingstoke)
Steel, Rt Hon David


Moate, Roger
Steen, Anthony


Monro, Hector
Stevens, Martin


Montgomery, Fergus
Stewart, Ian (Hitchin)


Moore, John
Stewart, A.(ERenfrewshire)


Morgan, Geraint
Stokes, John


Morris, M. (N'hamptonS)
StradlingThomas, J.


Morrison, Hon C. (Devizes)
Tapsell, Peter


Morrison, HonP. (Chester)
Taylor, Robert (CroydonNW)


Mudd, David
Taylor, Teddy (S'endE)


Murphy, Christopher
Tebbit, Norman


Myles, David
Temple-Morris, Peter


Neale, Gerrard
Thatcher, Rt Hon Mrs M.


Needham, Richard
Thomas, Rt Hon Peter


Nelson, Anthony
Thompson, Donald


Neubert, Michael
Thorne, Neil(Ilford South)


Newton, Tony
Thornton, Malcolm


Normanton, Tom
Townend, John(Bridlingtor)


Nott, Rt Hon John
Townsend, CyrilD, (B'heath)


Onslow, Cranley
Trippier, David

Trotter, Neville
Wells, Bowen


van Straubenzee, W. R.
Wheeler, John


Vaughan, Dr Gerard
Whitelaw, Rt Hon William


Viggers, Peter
Whitney, Raymond


Waddington, David
Wickenden, Keith


Wakeham, John
Wiggin, Jerry


Waldegrave, Hon William
Wigley, Dafydd


Walker, Rt Hon P.(W'cester)
Wilkinson, John


Walker, B. (Perth)
Williams, D.(Montgomery)


Walker-Smith, Rt Hon Sir D.
Winterton, Nicholas


Wall, Patrick
Wolfson, Mark


Waller, Gary
Young, Sir George(Acton)


Walters, Dennis
Younger, Rt Hon George


Ward, John



Warren, Kenneth
Tellers for the Ayes:


Watson, John
Mr. Spencer Le Marchant and Mr. Anthony Berry.


Wells, John(Maidstone)

Lewis, Ron (Carlisle)
Ross, Ernest (Dundee West)


Litherland, Robert
Rowlands, Ted


Lofthouse, Geoffrey
Ryman, John


Lyon, Alexander(York)
Sever, John


Lyons, Edward (Bradf'dW)
Sheerman, Barry


Mabon, Rt Hon Dr J. Dickson
Sheldon, Rt Hon R.


McCart ney, Hugh
Shore, Rt Hon Peter


McDonald, Dr Oonagh
Silkin, Rt Hon J. (Deptford)


McGuire, Michael (Ince)
Silkin, Rt Hon S. C. (Dulwich)


McKay, AWen(Penistone)
Silverman, Julius


McKelvey, William
Skinner, Dennis


MacKenzie, Rt Hon Gregor
Smith, Rt Hon J. (N Lanark)


McMahon, Andrew
Snape, Peter


McNamara, Kevin
Soley, Clive


McTaggart, Robert
Stallard, AW.


Magee, Bryan
Stewart, Rt Hon D. (W Isles)


Marks, Kenneth
Stoddart, David


Marshal1, D(G'gowS'ton)
Stott, Roger


Marshall, Dr Edmund(Goole)
Strang, Gavin


Marshall, Jim (Leicester S)
Straw, Jack


Martin, M(G'gowS'burn)
Taylor, MrsAnn (Bolton W)


Mason, Rt Hon Roy
Thomas, Daiydd(Merioneth)


Maxton, John
Thomas, Jeffrey(Abertillery)


Maynard, MissJoan
Thomas, Dr R.(Carmarthen)


Meacher, Michael
Thorne, Stan (PrestonSouth)


Mellish, Rt Hon Robert
Tilley, John


Mikardo, Ian
Tinn, James


Millan, Rt Hon Bruce
Torney, Tom


Mitchell, Austin(Grimsby)
Urwin, Rt Hon Tom


Mitchell, R. C. (Soton Itchen)
Varley, Rt Hon Eric G.


Morris, Rt Hon A. (W'shawe)
Wainwcenter, E,(DearneV)


Morris, Rt Hon J. (Aberavon)
Walker, Rt Hon H. (D'caster)


Mort on, George
Watkins, David


Moyle, Rt Hon Roland
Weetch, Ken


Mulley, Rt Hon Frederick
Wellbeloved, James


Newens, Stanley
Welsh, Michael


Oakes, Rt Hon Gordon
White, Frank R.


Ogden, Eric
White, J. (G'gowPollok)


O'Halloran, Michael
Whitehead, Phillip


O'Neill, Martin
Whitlock, William


Orme, Rt Hon Stanley
Willey, Rt Hon Frederick


Palmer, Art hur
Williams, Rt Hon A,(S'sea W)


Park, George
Williams, Sir T.(W'ton)


Parker, John
Wilson, Gordon (DundeeE)


Pendry, Tom
Wilson, Rt Hon Sir H,(H'ton)


Powell, Raymond(Ogmore)
Wilson, William (C'trySE)


Prescott, John
Winnick, David


Race, Reg
Woodall, Alec


Radice, Giles
Woolmer, Kenneth


Rees, Rt Hon M (Leeds S)
Wcenter, Sheila


Richardson, Jo
Young, David (BoltonE)


Roberts, Albert(Normanton)



Roberts, Allan (Bootle)
Tellers for the Noes:


Roberts, Gwilym (Cannock)
Mr. James Hamilton and Mr. Joseph Dean.


Robinson, G. (Coventry NW)



Rooker, J, W.

Question accordingly agreed to.

Orders of the Day — 8. MATCHES AND MECHANICAL LIGHTERS

Motion made, and Question,
That, as from 11th March 1981, the Matches and Mechanical Lighters Duties Act 1979 shall be amended as follows—

(1) In section 1(1) (duty on matches at the rate of £0·49 for every 7,200 matches) for "£0·49" there shall be substituted "£1·15".
(2) In section 6(1) (duty on mechanical lighters at the rate of £0·20 for each lighter) for "£0·20" there shall be substituted "£0·50".
(3) In section 6(3) (exemption for lighters constructed solely for the purpose of igniting gas for domestic use) after the word "domestic" there shall be inserted the words "or industrial".
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 9. POOL BETTING DUTY

Motion made, and Question,
That, as from 1st July 1981, the relevant monetary limits referred to in subsection (4) of section 6 of the Betting and Gaming Duties Act 1972 shall be the limits referred to in the provisions mentioned in that subsection as they have effect on that date.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968. —[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — IO. HYDROCARBON OIL ETC.

Motion made, and Question,

That, as from 6 o'clock in the evening of 10th March 1981, section 6(1) of the Hydrocarbon Oil Duties Act 1979 shall have effect with the substitution for "0·10 a litre" of "£0·1382 a litre".

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968. —[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions):—

The House divided: Ayes 295, Noes 281.

Division No. 103]
[10.50 pm


AYES


Adley, Robert
Cadbury, Jocelyn


Aitken, Jonathan
Carlisle, John (Luton West)


Alexander, Richard
Carlisle, Kenneth(Lincoln)


Alison, Michael
Carlisle, Rt Hon M. (R'c'n)


Amery, Rt Hon Julian
Chalker, Mrs. Lynda


Ancram, Michael
Channon, Rt. Hon. Paul


Arnold, Tom
Chapman, Sydney


Ashley, Rt Hon Jack
Churchill, W, S.


Aspinwall, Jack
Clark, Hon A. (Plym'th, S'n)


Atkins, Rt Hon H. (S'thorne)
Clark, Sir W. (Croydon S)


Atkins, Roben(PrestonN)
Clarke, Kenneth (Rushcliffe)


Atkinson, David (B'm'th, E)
Clegg, Sir Walter


Baker, Kennetr(St, M'bone)
Cockeram, Eric


Baker, Nicholas (N Dorset)
Colvin, Michael


Banks, Robert
Cope, John


Beau mont-Dark, Anthony
Corrie, John


Bell, Sir Ronald
Costain, Sir Albert


Bendall, Vivian
Cranborne, Viscount


Bennett, Sir Frederic (T'bay)
Critchley, Julian


Benyon, Thomas (A'don)
Crouch, David


Benyon, W. (Buckingham)
Dickens, Geoffrey


Bevan, David Qilroy
Douglas-Hamilton, LordJ.


Biffen, Rt Hon John
Dover, Denshore


Biggs-Davison, John
duCann, Rt Hon Edward


Blackburn, John
Dunn, Robert (Dartford)


Blaker, Peter
Durant, Tony


Body, Richard
Eden, Rt Hon Sir John


Bonsor, Sir Nicholas
Edwards, Rt Hon N. (P'broke)


Boscawen, Hon Robert
Eggar, Tim


Bottomley, Peter (W'wich W)
Elliott, Sir William


Bowden, Andr ew
Emery, Peter


Boyson, Dr Rhodes
Eyre, Reginald


Braine, Sir Bernard
Fairbairn, Nicholas


Bcenter, Graham
Fairgrieve, Russell


Brittan, Leon
Faith, MrsSheila


Brooke, Hon Peter
Fell, Anthony


Brown, Michael(Brigg&amp;Sc'n)
Fenner, Mrs Peggy


Browne, John (Winchester)
Finsberg, Geoffrey


Buchanan-Smith, Alick
Fisher, Sir Nigel


Buck, Antony
Fletcher, A. (Ed'nb'ghN)


Budgen, Nick
Fletcher-Cooke, Sir Charles


Bulmer, Esmond
Forman, Nigel


Burden, Sir Frederick
Fowler, Rt Hon Norman


Butcher, John
Fox, Marcus


Butler, Hon Adam
Fraser, Rt Hon Sir Hugh





Fry, Peter
Mates, Michael


Galbraith, Hon T. G. D.
Mather, Carol


Gardiner, George (Reigate)
Maude, Rt Hon Sir Angus


Gardner, Edward (SFylde)
Mawby, Ray


Garel-Jones, Tristan
Mawhinney, Dr Brian


Gilmour, Rt Hon Sir Ian
Maxwell-Hyslop, Robin


Glyn, Dr Alan
Mayhew, Patrick


Goodhart, Philip
Mellor, David


Goodhew, Victor
Meyer, Sir Anthony


Goodlad, Alastair
Miller, Hal(B'grove)


Gorst, John
Mills, Iain(Meriden)


Gow, Ian
Miscampbell, Norman


Gower, Sir Raymond
Mitchell, David(Basingstoke)


G rant, Anthony (Harrow C)
Moate, Roger


Gray, Hamish
Monro, Hector


Grieve, Percy
Montgomery, Fergus


Griffiths, PeterPortsm'thN)
Moore, John


Grist, Ian
Morris, M. (N'hamptonS)


Grylls, Michael
Morrison, Hon C. (Devizes)


Gummer, JohnSelwyn
Morrison, Hon P. (Chester)


Hamilton, Hon A.
Murphy, Christopher


Hamilton, Michael (Salisbury)
Neale, Gerrard


Hampson, Dr Keith
Needham, Richard


Hannam, John
Nelson, Anthony


Haselhurst, Alan
Neubert, Michael


Hastings, Stephen
Newton, Tony


Havers, Rt Hon Sir Michael
Normanton, Tom


Hawkins, Paul
Nott, Rt Hon John


Hawksley, Warren
Onslow, Cranley


Hayhoe, Barney
Oppenheim, Rt Hon Mrs S.


Heath, Rt Hon Edward
Page, Rt Hon Sir G. (Crosby)


Heddle, John
Page, Richard (SW Herts)


Heseltine, Rt Hon Michael
Parkinson, Cecil


Higgins, Rt Hon Terence L.
Parris, Matthew


Hill, James
Patten, Christopher(Bath)


Hogg, Hon Douglas(Gr'th'm)
Patten, John(Oxford)


Holland, Philip(Carlton)
Pattie, Geoffrey


Hordern, Peter
Pawsey, James


Howe, Rt Hon Sir Geoffrey
Percival, Sir Ian


Howell, Rt Hon D.(G'ldf'd)
Peyton, Rt Hon John


Howell, Ralph (NNorfolk)
Pink, R, Bonner


Hunt, David (Wirral)
Porter, Barry


Hunt, John(Ravensbourne)
Prentice, Rt Hon Reg


Hurd, Hon Douglas
Price, Sir David (Eastleigh)


Irving, Charles(Cheltenham)
Prior, Rt Hon James


Jenkin, Rt Hon Patrick
Proctor, K. Harvey


Jessel, Toby
Pym, Rt Hon Francis


JohnsonSmith, Geoffrey
Raison, Timothy


Jopling, Rt Hon Michael
Rathbone, Tim


Joseph, Rt Hon Sir Keith
Rees, Peter (Dover and Deal)


Kaberry, Sir Donald
Rees-Davies, W. R.


Kellett-Bowman, MrsElaine
Renton, Tim


Kershaw, Anthony
Rhodes James, Robert


Kimball, Marcus
RhysWilliams, Sir Brandon


King, Rt Hon Tom
Ridley, Hon Nicholas


Lamont, Norman
Ridsdale, Julian


Langford-Holt, Sir John
Rifkind, Malcolm


Latham, Michael
Rippon, Rt Hon Geoffrey


Lawrence, Ivan
Roberts, M.(Cardiff NW)


Lawson, Rt Hon Nigel
Roberts, Wyn (Conway)


Lee, John
Rossi, Hugh


Lennox-Boyd, Hon Mark
Rost, Peter


Lester Jim (Beeston)
Royle, Sir Anthony


Lewis, Kenneth(Rutand)
Sainsbury, Hon Timothy


Lloyd, Ian (Havant&amp; W'loo)
St. John-Stevas, Rt Hon N.


Lloyd, Peter (Fareham)
Scott, Nicholas


Loveridge, John
Shaw, Giles (Pudsey)


Luce, Richard
Shaw, Michael(Scarborough)


Lyell, Nicholas
Shelton, William(Streatham)


McCrindle, Robert
Shepherd, Richard


Macfarlane, Neil
Shersby, Michael


MacGregor, John
Silvester, Fred


Macmillan, Rt Hon M.
Sims, Roger


McNair-Wilson, M. (N'bury)
Skeet, T. H. H.


McNair-Wilson, P. (NewF'st)
Smith, Dudley


Madel, David
Speed, Keith


Major, John
Speller, Tony


Marlow, Tony
Spence, John


MarshallMichael(Arundel)
Spicer, Jim (WestDorset)


Mart en, Neil(Banbury)
Spicer, Michael (S Worcs)






Sproat, Iain
Waddington, David


Squire, Robin
Wakeham, John


Stainton, Keith
Waldeg rave, Hon William


Stanbrook, Ivor
Walker, Rt Hon P. (W'cester)


Stanley, John
Walker-Smith, Rt Hon Sir D.


Steen, Anthony
Wall, Patrick


Stevens, Martin
Waller, Gary


Stewart, Ian (Hitchin)
Ward, John


Stewart, A.(ERenfrewshire)
Warren, Kenneth


Stokes, John
Watson, John


StradlingThomas, J.
Wells, John(Maidstone)


Taylor, Robert (CroydonNW)
Wells, Bowen


Taylor, Teddy (S'end E)
Wheeler, John


Tebbit, Norman
Whitelaw, Rt Hon William


Thatcher, Rt Hon Mrs M.
Whitney, Raymond


Thomas, Rt Hon Peter
Wickenden, Keith


Thompson, Donald
Wiggin, Jerry


Thome, Neil (IlfordSouth)
Wilkinson, John


Thornton, Malcolm
Wolfson, Mark


Townend, John (Bridlington)
Young, Sir George (Acton)


Trippier, David
Younger, Rt Hon George


Trotter, Neville



van Straubenzee, W. R.
Tellers for the Ayes:


Vaughan, Dr Gerard
Mr. Spencer Le Marchant and Mr. Anthony Berry


Viggers, Peter





NOES


Abse, Leo
Davies, Ifor (Gower)


Adams, Allen
Davis, Clinton (Hackney C)


Allaun, Frank
Davis, T. (B'ham, Stechf''d)


Alton, David
Deakins, Eric


Anderson, Donald
Dempsey, James


Archer, Rt Hon Peter
Dewar, Donald


Ashley, Rt Hon Jack
Dixon, Donald


Ashton, Joe
Dobson, Frank


Atkinson,N.(H'gey)
Dormand, Jack


Bagier, Gordon A.T.
Douglas, Dick


Barnett, Guy (Greenwich)
Douglas-Mann, Bruce


Barnett, Rt Hon Joel (H'wd)
Dubs, Alfred


Beith, A.J.
Duffy, A. E. P.


Benn, Rt Hon A. Wedgwood
Dunlop, John


Bennett, Andrew(St'kp'tN)
Dunn, James A.


Bidwell, Sydney
Dunnett, Jack


Booth, Rt Hon Albert
Dunwoody, Hon Mrs G.


Boothroyd, MissBetty
Eadie, Alex


Bottomley, Rt Hon A(M'b'ro)
Eastham, Ken


Bradley, Tom
Edwards, R. (W'hampt'n S E)


Bray, Dr Jeremy
Ellis, R. (NED'bysh're)


Brocklebank-Fowler, C.
Ellis, Tom (Wrexham)


Brown, Hugh D. (Proven)
English, Michael


Brown, R. C. (N'castle W)
Ennals, Rt Hon David


Brown, Ron(E'burgh, Leith)
Evans, Ioan (Aberdare)


Brown, Ronald W. (H'ckn'yS)
Evans, John (Newton)


Callaghan, Rt Hon J.
Farr, John


Callaghan, Jim (Midd't'n&amp;P)
Field, Frank


Campbell, Ian
Fitch, Alan


Campbell-Savours, Dale
Fitt, Gerard


Canavan, Dennis
Flannery, Martin


Cant, R. B.
Fletcher, Raymond (IIkeston)


Carmichael, Neil
Fletcher, Ted (Darlington)


Carter-Jones, Lewis
Foot, Rt Hon Michael


Cartwcenter, John
Ford, Ben


Clark, Dr David (S Shields)
Forrester, John


Cocks, Rt Hon M. (B'stolS)
Foster, Derek


Cohen, Stanley
Foulkes, George


Coleman, Donald
Fraser, J.(Lamb'th,N'w'd)


Concannon, Rt Hon J. D.
Freeson, Rt Hon Reginald


Conlan, Bernard
Freud, Clement


Cook, Robin F.
Garrett, John (NorwichS)


Cowans, Harry
Garrett, W. E. (Wallsend)


Craigen, J. M.
George, Bruce


Crawshaw, Richard
Gilbert, Rt Hon Dr John


Crowther, J. S.
Ginsburg, David


Cryer, Bob
Golding, John


Cunliffe, Lawrence
Gourlay, Harry


Cunningham, G. (IslingtonS)
Graham, Ted


Cunningham, Dr J. (W'h'n)
Grant, George(Morpeth)


Dalyell, Tam
Grant, John (IslingtonC)


Davidson, Arthur
Griffiths, E. (B'ySt. Edm'ds)


Davies, Rt Hon Denzil (L'lli)
Grimond, Rt Hon J.





Hamilton, W. W. (C'tralFife)
Mulley, Rt Hon Frederick


Hardy, Peter
Newens, Stanley


Harrison, Rt Hon Walter
Oakes, Rt Hon Gordon


Hart, Rt Hon Dame Judith
Ogden, Eric


Hattersley, Rt Hon Roy
O'Halloran, Michael


Haynes, Frank
O'Neill, Martin


Healey, Rt Hon Denis
Orme, Rt Hon Stanley


Heffer, EricS.
Owen, Rt Hon Dr David


Hicks, Robert
Palmer, Arthur


Hogg, N. (EDunb't'nshire)
Park, George


Holland, S,(L'b'th, Vauxh'll)
Parker, John


HomeRobertson, John
Pendry, Tom


Homewood, William
Penhaligon, David


Hooley, Frank
Powell, Rt Hon J, E. (S Down)


Horam, John
Powell, Raymond(Ogmore)


Howell, Rt Hon D.
Prescott, John


Howells, Geraint
Race, Reg


Huckfield, Les
Radice, Giles


Hudson Davies, Gwilym E.
Rees, Rt Hon M (Leeds S)


Hughes, Mark (Durham)
Richardson, Jo


Hughes, Robert (Aberdeen N)
Roberts, Albert(Normanton)


Hughes, Roy (Newport)
Roberts, Allan(Bootle)


Janner, Hon Greville
Robeits, Gwilym (Cannock)


Jay, Rt Hon Douglas
Robertson, George


John, Brynmor
Robinson, G. (Coventry NW)


Johnson, James (Hull West)
Robinson, P.(Belfast E)


Johnson, Russell(Inverness)
Rodgers, Rt Hon William


Jones, Barry (East Flint)
Rooker, J. W.


Jones, Dan (Burnley)
Roper, John


Kaufman, Rt Hon Gerald
Ross, Ernest (Dundee West)


Kerr, Russell
Ross, Stephen (Isle of Wight)


Kilroy-Silk, Robert
Ross,Wm. (Londonderry)


Kinnock, Neil
Rowlands, Ted


Knox, David
Ryman, John


Lambie, David
Sandelson, Neville


Lamborn, Harry
Sever, John


Lamond, James
Sheerman, Barry


Leadbitter, Ted
Sheldon, Rt Hon R.


Leighton, Ronald
Shore, Rt Hon Peter


Lestor, Miss Joan
Short, Mrs Renee


Lewis, Arthur(N'ham NW)
Silkin, Rt Hon J. (Deptford)


Lewis, Ron (Carlisle)
Silkin, Rt Hon S. C. (Dulwich)


Litherland, Robert
Silverman, Julius


Lofthouse, Geoffrey
Skinner, Dennis


Lyon, AlexanderfVony
Smith, Rt Hon J. (N Lanark)


Lyons, Edward (Bradf'd W)
Snape, Peter


Mabon, Rt Hon Dr J. Dickson
Soley, Clive


McCartney, Hugh
Spearing, Nigel


McCusker, H.
Spriggs, Leslie


McDonald, Dr Oonagh
Stallard, A, W.


McGuire, Michael (Ince)
Steel, Rt Hon David


McKay, Allen (Penistone)
Stewart, Rt Hon D. (W Isles)


McKelvey, William
Stoddart, David


MacKenzie, Rt Hon Gregor
Stott, Roger


Maclennan, Robert
Strang, Gavin


McMahon, Andrew
Straw, Jack


McNamara, Kevin
Summerskill, Hon Dr Shirley


McQuarrie, Albert
Tapsell, Peter


McTaggart, Robert
Taylor, Mrs Ann (Bolton W)


Magee, Bryan
Temple-Morris, Peter


Marks, Kenneth
Thomas, Daiydd (Merioneth)


Marshall, D(G'gowS'ton)
Thomas, Jeffrey(Abertillery)


Marshall, Dr Edmund(Goole)
Thomas, Mike (NewcastleE)


Marshall, Jim (LeicesterS)
Thomas, Dr H. (Carmarthen)


Martin, M (G'gowS'bum)
Thorne, Stan (PrestonSouth)


Mason, Rt Hon Roy
Tilley, John


Maxton, John
Tinn, James


Maynard, Miss Joan
Torney, Tom


Meacher, Michael
Urwin, Rt Hon Tom


Mellish, Rt Hon Robert
Varley, Rt Hon Eric G.


Mikardo, Ian
Wainwcenter, E. (DearneV)


Millan, Rt Hon Bruce
Wainwcenter, R.(ColneV)


Miller, Dr M. S. (EKilbride)
Walker, Rt Hon H. (D'caster)


Mitchell, Austin(Grimsby)
Watkins, David


Mitchell, R. C. (Soton Itchen)
Weetch, Ken


Molyneaux, James
Wellbeloved, James


Morris, Rt Hon A. (W'shawe)
Welsh, Michael


Morris, Rt Hon J. (Aberavon)
White, Frank R.


Morton, George
White, J. (G'gowPollok)


Moyle, Rt Hon Roland
Whitehead, Phillip






Whitlock, William
Woodall, Alec


Wigley, Dafydd
Woolmer, Kenneth


Willey, Rt Hon Frederick
Wrigglesworth, Ian


Williams, Rt Hon A,(S'sea W)
Wcenter, Sheila


Williams, Sir T.(W'ton)
Young, David (Bolton E)


Wilson, Gordon (DundeeE)



Wilson, Rt Hon Sir H, (H'ton)
Tellers for the Noes:


Wilson, William (C'trySE)
Mr. James Hamilton and Mr. Joseph Dean


Winnick, David



Winterton, Nicholas

Question accordingly agreed to.

Orders of the Day — II. VEHICLE EXCISE DUTY

Motion made, and Question,
That the Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) 1972 shall have effect with the amendments set Out below.

PROVISIONS SUBSTITUTED FOR PART II OF SCHEDULE I TO ACT OF I97IAND ACT OF I972


Description of vehicle
Rate of duty



£


1. Bicycles and tricycles of which the cylinder capacity of the engine does not exceed 150 cubic centimetres.. … … … … … … … … … …
7·00


2. Bicycles of which the cylinder capacity of the engine exceeds 150 cubic centimetres but does not exceed 250 cubic centimetres; tricycles (other than those in the foregoing paragraph) and vehicles (other than mowing machines) with more than three wheels, being tricycles and vehicles neither constructed nor adapted for use nor used for the carriage of a driver or passenger… … … … … …
14·00


3. Bicycles and tricycles not in the foregoing paragraphs… … … … …
28·00

But this Resolution shall not authorise the making of amendments which would result in different provisions being in force in different parts of Great Britain.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
(1) In the said Acts of 1971 and 1972—

(a) for the provisions of Part II of Schedules 1 to 5 (annual rates of duty) there shall be substituted the provisions set out below;
(b) in section 16 (trade licences) for "£30" and "£6" there shall be substituted respectively "£35" and "£7";
(c) in paragraph 1 of Part I of Schedule 1 (annual rates of duty on certain vehicles not exceeding 8¼ cwt. for ''8¼ cwt." there shall be substituted "425 kilograms".
(2) Paragraph (1) above has effect in relation to licences taken out after 10th March 1981.

PROVISIONS SUBSTITUTED FOR PART II OF SCHEDULE 3 TO ACT OF I97I



Weight unladen of vehicle
Rate of duty


1.
2.
3.
4.
5.


Description of vehicle
Exceeding
Not exceeding
Initial
Additional for each ton or part of a ton in excess of the weight in column 2





£
£


1. Agricultural machines; digging machines; mobile cranes; works trucks; mowing machines; fishermen's tractors
—
—
12·00
—


2. Haulage vehicles, being show-men's vehicles
—
7¼ tons
116·00
—



7¼ tons
8 tons
139·00
—



8 tons
10 tons
163·00
—



10 tons
—
163·00
25·00


3. Haulage vehicles, not being showmen's vehicles
—
2 tons
138·00




2 tons
4 tons
248·00
—



4 tons
6 tons
359·00
—



6 tons
7¼tons
469·00
—



7¼ tons
8 tons
573·00
—



8 tons
10 tons
573·00
97·00



10 tons
—
766·00
110·00

PROVISIONS SUBSTITUTED FOR PART II OF SCHEDULE 4 TO ACT OF I97ITABLES SHOWING ANNUAL RATES OF DUTY ON GOODS VEHICLES


TABLE A


GENERAL RATES OF DUTY



Weight unladen of vehicle
Rate of duty


1.
2.
3.
4.
5.


Description of vehicle
exceeding
Not Exceeding
Initial
 Additional for each ¼ ton or part of a ¼ ton in excess of the weight in column 2





£
£


1. Farmers' goods vehicles …
—
12 cwt
41·00
—



12 cwt
16 cwt
44·00
—



16 cwt
1 ton
48·00
—



1 ton
3 tons
48·00
6



3 tons
5 tons
95·00
4



5 tons
7 tons
130·00
3



7 tons
9 tons
156·00
2



9 tons
—
185·00
5


2. Showmen's goods vehicles …

12 cwt
41·00




12 cwt
16 cwt
44·00
—



16 cwt
1 ton
48·00
—



1 ton
3 tons
48·00
6



3 tons
5 tons
95·00
4



5 tons
6 tons
130·00
3



6 tons
9 tons
140·00
6



9 tons
—
222·00
8


3. Tower wagons … … …
—
12 cwt
55·00
—



12 cwt
16 cwt
61·00
—



16 cwt
1 ton
69·00
—



1 ton
4 tons
69·00
7



4 tons
6 tons
153·00
8



6 tons
9 tons
217·00
7



9 tons
—
315·00
12


4. Goods vehicles not included in any of the foregoing provisions of this Part of this Schedule
—
16 cwt
70·00
—



16 cwt
1 ton
76·00
—



1 ton
4 tons
76·00
20



4 tons
9 tons
305·00
35



9 tons
10 tons
1,081–00
38



10 tons
—
1,230–00
45

PROVISIONS SUBSTITUTED FOR PART II OF SCHEDULE 4 TO ACT OF I972TABLES SHOWING ANNUAL RATES OF DUTY ON GOODS VEHICLES


TABLE A


GENERAL RATES OF DUTY



Weight unladen of vehicle
Rate of duty


1.
2.
3.
4.
5.


Description of vehicle
Exceeding
Not exceeding
Initial
Additional for each ¼ ton or part of a ¼ ton in excess of the weight in column 2





£
£


1. Farmers'goods vehicles…
—
12 cwt
41·00
—



12 cwt
16 cwt
44·00
—



16 cwt
1 ton
48·00
—



1 ton
3 tons
48·00
6·00



3 tons
6 tons
97·00
2·00



6 tons
8 tons
127·00
1·00



8 tons
9 tons
140·00
2·00



9 tons
—
161·00
3·00


2. Showmen's goods vehicles; tower wagons
—
12 cwt
53·00
—



12 cwt
16 cwt
55·00
—



16 cwt
1 ton
62·00
—



1 ton
3 tons
64·00
3·00



3 tons
6 tons
87·00
5·00



6 tons
9 tons
142·00
6·00



9 tons
—
222·00
8·00


3. Goods vehicles not included in any of the foregoing provisions of this Part
—
16 cwt
70·00
—



16 cwt
1 ton
76·00
—



1 ton
3 tons
76·00
14·00



3 tons
4 tons
187·00
22·00



4 tons
6 tons
276·00
29·00



6 tons
9 tons
508·00
33·00



9 tons
—
974·00
40·00

TABLE B


RATES OF DUTY ON GOODS VEHICLES USED FOR DRAWING TRAILERS


1.
Weight unladen of vehicle
4.


Description of vehicle
2. Exceeding
3. Not exceeding
Rate of duty





£


1. Showmen's goods vehicles—…
—
—
41·00


2. Other goods vehicles—… …
—
l½ tons
41·00



l½ tons
3 tons
55·00



3 tons
4 tons
92·00



4 tons
6 tons
124·00



6 tons
9 tons
154·00



9 tons
—
168·00

PROVISIONS SUBSTITUTED FOR PART II OF SCHEDUELE 5 TO ACT OF 1971


Description of vehicle
Rate of duty


1. Vehicles not exceeding seven horse power, if registered under the Roads Act 1920 for the first time before 1st January 1947… … … … … … …
50·00


2. Vehicles not included above… … … … … … … … … …
70·00

put forthwith pursuant to Standing Order No. 94(Ways and Means motions):

The House divided:Ayes 322,Noes 297

Division No. 104]
[11.05 pm


AYES


Adley, Robert
Dunn, Robert (Dartford)


Aitken, Jonathan
Durant, Tony


Alexander, Richard
Eden, Rt Hon Sir John


Alison, Michael
Edwards, Rt Hon N. (P'broke)


Amery, Rt Hon Julian
Eggar, Tim


Ancram, Michael
Elliott, Sir William


Arnold, Tom
Emery, Peter


Aspinwall, Jack
Eyre, Reginald


Atkins, Rt Hon H. (S'thorne)
Fairbairn, Nicholas


Atkins, Robert (PrestonN)
Fairgrieve, Russell


Atkinson, David (B'm'th, E)
Faith, Mrs Sheila


Baker, Kenneth (St, M'bone)
Farr, John


Baker, Nicholas (N Dorset)
Fell, Anthon y


Banks, Robert
Fenner, Mrs Peggy


Beaumont-Dark, Anthon y
Finsberg, Geoffrey


Bell, Sir Ronald
Fisher, Sir Nigel


Bendall, Vivian
Fletcher, A. (Ed'nb'ghN)


Bennett, Sir Frederic (T'bay)
Fletcher-Cooke, Sir Charles


Benyon, Thomas (A'don)
Forman, Nigel


Benyon, W. (Buckingham)
Fowler, Rt Hon Norman


Best, Keith
Fox, Marcus


Bevan, David Gilroy
Fraser, Rt Hon Sir Hugh


Biffen, Rt Hon John
Fraser, Peter (South Angus)


Biggs-Davison, John
Fry, Peter


Blackburn, John
Galbraith, Hon T. G. D.


Blaker, Peter
Gardiner, George(Reigate)


Body, Richard
Gardner, Edward (S Fylde)


Bonsor, Sir Nicholas
Garel-Jones, Tristan


Boscawen, Hon Robert
Gilmour, Rt Hon Sir Ian


Bottomley, Peter (W'wich W)
Glyn, Dr Alan


Bowden, Andrew
Goodhart, Philip


Boyson, Dr Rhodes
Goodhew, Victor


Braine, Sir Bernard
Goodlad, Alastair


Bright, Graham
Gorst, John


Brittan, Leon
Gow, Ian


Brooke, Hon Peter
Gower, Sir Raymond


Brotherton, Michael
Grant, Anthon y (Harrow C)


Brown, Michael(Brigg&amp;Sc'n)
Gray, Hamish


Browne, John (Winchester)
Grieve, Percy


Buchanan-Smith, Alick
Griffiths, E, (B'ySt. Edm'ds)


Buck, Antony
Griffiths, Peter Portsm'th N)


Budgen, Nick
Grist, Ian


Bulmer, Esmond
Grylls, Michael


Burden, Sir Frederick
Gummer, John Selwyn


Butcher, John
Hamilton, Hon A.


Butler, Hon Adam
Hamilton, Michael (Salisbury)


Cadbury, Jocelyn
Hampson, Dr Keith


Carlisle, John (Luton West)
Hannam, John


Carlisle, Kenneth (Lincoln)
Haselhurst, Alan


Carlisle, Rt Hon M. (R'c'n)
Havers, Rt Hon Sir Michael


Chalker, Mrs. Lynda
Hawkins, Paul


Channon, Rt Hon Paul
Hawksley, Warren


Chapman, Sydney
Hayhoe, Barney


Churchill, W, S.
Heath, Rt Hon Edward


Clark, Hon A. (Plym'th, S'n)
Heddle, John


Clark, Sir W. (Croydon S)
Henderson, Barry


Clarke, Kenneth (Rushcliffe)
Heseltine, Rt Hon Michael


Clegg, Sir Walter
Hicks, Robert


Cockeram, Eric
Higgins, Rt Hon Terence L.


Colvin, Michael
Hill, James


Cope, John
Hogg, Hon Douglas ("Gr'th'm)


Corrie, John
Holland, Philip (Carlton)


Costain, Sir Albert
Hooson, Tom


Cranborne, Viscount
Hordern, Peter


Critchley, Julian
Howe, Rt Hon Sir Geoffrey


Crouch, David
Howell, Rt Hon D,(G'Idf'd)


Dean, Paul (North Somerset)
Howell, Ralph (N Norfolk)


Dickens, Geoffrey
Hunt, David (Wirral)


Dorrell, Stephen
Hunt, John(Ravensbourne)


Douglas-Hamilton, Lord J.
Irving, Charles(Cheltenham)


Dover, Denshore
Jenkin, Rt Hon Patrick


du Cann, Rt Hon Edward
Jessel, Toby





JohnsonSmith, Geoffrey
Pawsey, James


Jopling, Rt Hon Michael
Percival, Sir Ian


Joseph, Rt Hon Sir Keith
Peyton, Rt Hon John


Kaberry, Sir Donald
Pink, R, Bonner


Kellett-Bowman, Mrs Elaine
Pollock, Alexander


Kershaw, Anthon y
Porter, Barry


Kimball, Marcus
Prentice, Rt Hon Reg


King, Rt Hon Tom
Price, Sir David (Eastleigh)


Kitson, Sir Timothy
Prior, Rt Hon James


Knox, David
Proctor, K. Harvey


Lamont, Norman
Pym, Rt Hon Francis


Lang, Ian
Raison, Timothy


Langford-Holt, Sir John
Rathbone, Tim


Latham, Michael
Rees, Peter (Dover and Deal)


Lawrence, Ivan
Rees-Davies, W. R.


Lawson, Rt Hon Nigel
Renton, Tim


Lee, John
Rhodes James, Robert


Lennox-Boyd, Hon Mark
Rhys Williams, Sir Brandon


Lester, Jim (Beeston)
Ridley, Hon Nicholas


Lewis, Kenneth (Rutland)
Ridsdale, Julian


Lloyd, Ian (Havant &amp;W'loo)
Rifkind, Malcolm


Lloyd, Peter (Fareham)
Rippon, Rt Hon Geoffrey


Loveridge, John
Robert s, M. (Cardiff NW)


Luce, Richard
Robert s, Wyn (Conway)


Lyell, Nicholas
Rossi, Hugh


McCrindle, Robert
Rost, Peter


Macfarlane, Neil
Royle, Sir Anthony


MacGregor, John
Sainsbury, Hon Timothy


MacKay, John (Argyll)
St. John-Stevas, Rt Hon N.


Macmillan, Rt Hon M.
Scott, Nicholas


McNair-Wilson, M. (N'bury)
Shaw, Giles (Pudsey)


McNair-Wilson, P. (New F'st)
Shaw, Michael (Scarborough)


McQuarrie, Albert
Shelton, William (Streatham)


Madel, David
Shepherd, Colin(Hereford)


Major, John
Shepherd, Richard


Marland, Paul
Shersby, Michael


Marlow, Tony
Silvester, Fred


Marshall Michael (Arundel)
Sims, Roger


Mart en, Neil (Banbury)
Skeet, T. H. H.


Mates, Michael
Smith, Dudley


Mather, Carol
Speed, Keith


Maude, Rt Hon Sir Angus
Speller, Tony


Mawby, Ray
Spence, John


Mawhinney, Dr Brian
Spicer, Jim (West Dorset)


Maxwell-Hyslop, Robin
Spicer, Michael (S Worcs)


May hew, Patrick
Sproat, Iain


Mellor, David
Squire, Robin


Meyer, Sir Anthony
Stainton, Keith


Miller, Hal(B'grove)
Stanbrook, Ivor


Mills, Iain (Meriden)
Stanley, John


Mills, Peter (West Devon)
Steen, Anthony


Miscampbell, Norman
Stevens, Martin


Mitchell, David (Basingstoke)
Stewart, Ian (Hitchin)


Moate, Roger
Stewart, A. (E Renfrewshire)


Monro, Hector
Stokes, John


Montgomery, Fergus
Stradling Thomas, J.


Moore, John
Tapsell, Peter


Morgan, Geraint
Taylor, Robert (Croydon NW)


Morris, M. (N'hampton S)
Taylor, Teddy (S'end E)


Morrison, Hon C. (Devizes)
Tebbit, Norman


Morrison, Hon P. (Chester)
Temple-Morris, Peter


Mudd, David
Thatcher, Rt Hon Mrs M.


Murphy, Christopher
Thomas, Rt Hon Peter


Myles, David
Thompson, Donald


Neale, Gerrard
Thorne, Neil (Ilford South)


Needham, Richard
Thornton, Malcolm


Nelson, Anthon y
Townend, John (Bridlington)


Neubert, Michael
Townsend, Cyril D, (B'heath)


Newton, Tony
Trippier, David


Normanton, Tom
Trotter, Neville


Nott, Rt Hon John
van Straubenzee, W. R.


Onslow, Cranley
Vaughan, Dr Gerard


Oppenheim, Rt Hon Mrs S.
Viggers, Peter


Page, Rt Hon Sir G. (Crosby)
Waddington, David


Page, Richard (SW Herts)
Wakeham, John


Parkinson, Cecil
Waldegrave, Hon William


Parris, Matthew
Walker, Rt Hon P. (W'cester)


Patten, Christopher (Bath)
Walker, B. (Perth)


Patten, John (Oxford)
Walker-Smith, Rt Hon Sir D.


Pattie, Geoffrey
Wall, Patrick






Waller, Gary
Wiggin, Jerry


Walters, Dennis
Wilkinson, John


Ward, John
Williams, D, (Montgomery)


Warren, Kenneth
Winterton, Nicholas


Watson, John
Wolfson, Mark


Wells, John (Maidstone)
Young, Sir George (Acton)


Wells, Bowen
Younger, Rt Hon George


Wheeler, John



Whitelaw, Rt Hon William
Tellers for the Ayes:


Whitney, Raymond
Mr. Spencer Le Marchant and Mr. Anthon y Berry.


Wickenden, Keith





NOES


Abse, Leo
Dunnett, Jack


Adams, Allen
Dunwoody, Hon Mrs G.


Allaun, Frank
Eadie, Alex


Alton, David
Eastham, Ken


Anderson, Donald
Edwards, R. (W'hampt'n S E)


Archer, Rt Hon Peter
Ellis, H. (NE D'bysh're)


Ashley, Rt Hon Jack
Ellis, Tom (Wrexham)


Ashton, Joe
English, Michael


Atkinson, N.(H'gey)
Ennals, Rt Hon David


Bagier, Gordon A, T.
Evans, Ioan (Aberdare)


Barnett, Guy (Greenwich)
Evans, John (Newton)


Barnett, Rt Hon Joel (H'wd)
Field, Frank


Beith, A.J.
Fitch, Alan


Benn, Rt Hon A. Wedgwood
Fitt, Gerard


Bennett, Andrew (St'kp'tN)
Flannery, Martin


Bidwell, Sydney
Fletcher, Raymond (Ilkeston)


Booth, Rt Hon Albert
Fletcher, Ted (Darlington)


Boothroyd, MissBetty
Foot, Rt Hon Michael


Bottomley, Rt Hon A. (M'b'ro)
Ford, Ben


Bradley, Tom
Forrester, John


Bray, Dr Jeremy
Foster, Derek


Brown, Hugh D. (Provan)
Foulkes, George


Brown, R. C. (N'castle W)
Fraser, J. (Lamb 'th, N'w'd)


Brown, Ron(E'burgh, Leith)
Freeson, Rt Hon Reginald


Brown, Ronald W. (H'ckn'y S)
Freud, Clement


Callaghan, Rt Hon J.
Garrett, John (Norwich S)


Callaghan, Jim (Midd't'n&amp;P)
Garrett, W. E. (Wallsend)


Campbell, Ian
George, Bruce


Campbell-Savours, Dale
Gilbert, Rt Hon Dr John


Canavan, Dennis
Ginsburg, David


Cant, R. B.
Golding, John


Carmichael, Neil
Gourlay, Harry


Carter-Jones, Lewis
Graham, Ted


Cartwright, John
Grant, George(Morpeth)


Clark, Dr David (S Shields)
Grant, John (Islington C)


Cocks, Rt Hon M. (B'stol S)
Grimond, Rt Hon J.


Cohen, Stanley
Hamilton, W. W. (C'tral Fife)


Coleman, Donald
Hardy, Peter


Concannon, Rt Hon J. D.
Harrison, Rt Hon Walter


Conlan, Bernard
Hart, Rt Hon Dame Judith


Cook, Robin F.
Hattersley, Rt Hon Roy


Cowans, Harry
Haynes, Frank


Craigen, J. M.
Healey, Rt Hon Denis


Crawshaw, Richard
Heffer, Eric S.


Crowther, J, S.
Hogg, N. (E Dunb't'nshire)


Cryer, Bob
Holland, S,(L'b'th, Vauxh'll)


Cunliffe, Lawrence
HomeRobertson, John


Cunningham, G. (Islington S)
Homewood, William


Cunningham, Dr J. (W'h'n)
Hooley, Frank


Dalyell, Tam
Horam, John


Davidson, Arthur
Howell, Rt Hon D.


Davies, Rt Hon Denzil (L'lli)
Howells, Geraint


Davies, Ifor (Gower)
Huckfield, Les


Davis, Clinton (Hackney C)
Hudson Davies, Gwilym E.


Davis, T. (B'ham, Stechf'd)
Hughes, Mark (Durham)


Deakins, Eric
Hughes, Robert (Aberdeen N)


Dempsey, James
Hughes, Roy (Newport)


Dewar, Donald
Janner, Hon Greville


Dixon, Donald
Jay, Rt Hon Douglas


Dobson, Frank
John, Brynmor


Dormand, Jack
Johnson, James (Hull West)


Douglas, Dick
Johnston, Russell Inverness


Douglas-Mann, Bruce
Jones, Barry (East Flint)


Dubs, Alfred
Jones, Dan (Burnley)


Duffy, A. E. P.
Kaufman, Rt Hon Gerald


Dunlop, John
Kerr, Russell


Dunn, James A.
Kilroy-Silk, Robert





Kinnock, Neil
Rooker, J. W.


Lambie, David
Roper, John


Lamond, James
Ross, Ernest (Dundee West)


Leadbitter, Ted
Ross, Stephen (Isle of Wight)


Leighton, Ronald
Rowlands, Ted


Lestor, Miss Joan
Ryman, John


Lewis, Arthur (N'ham NW)
Sandelson, Neville


Lewis, Hon (Carlisle)
Sever, John


Litherland, Robert
Sheerman, Barry


Lofthouse, Geoffrey
Sheldon, Rt Hon R.


Lyon, Alexander York)
Shore, Rt Hon Peter


Lyons, Edward (Bradf'd W)
Short, Mrs Renæe


Mabon, Rt Hon Dr J. Dickson
Silkin, Rt Hon J. (Deptford)


McCartney, Hugh
Silkin, Rt Hon S. C. (Dulwich)


McDonald, Dr Oonagh
Silverman, Julius


McGuire, Michael (Ince)
Skinner, Dennis


McKay, Allen (Penistone)
Smith, Rt Hon J. (N Lanark)


McKelvey, William
Snape, Peter


MacKenzie, Rt Hon Gregor
Soley, Clive


Maclennan, Robert
Spearing, Nigel


McMahon, Andrew
Spriggs, Leslie


McNamara, Kevin
Stallard, A. W.


McTaggart, Robert
Steel, Rt Hon David


Magee, Bryan
Stewart, Rt Hon D. (W Isles)


Marks, Kenneth
Stoddart, David


Marshall, D(G'gowS'ton)
Stott, Roger


Marshall, Dr Edmund (Gooled)
Strang, Gavin


Marshall, Jim (Leicester S)
Straw, Jack


Manrtin, M (G'gowS'burn)
Summerskill, Hon Dr Shirley


Mason, Rt Hon Roy
Taylor, Mrs Ann (Bolton W)


Maxton, John
Thomas, Dafydd (Merioneth)


Maynard, Miss Joan
Thomas, Jeffrey(Abertillery)


Meacher, Michael
Thomas, Mike (Newcastle E)


Mellish, Rt Hon Robert
Thomas, Dr R. (Carmarthen)


Mikardo, Ian
Thorne, Stan (Preston South)


Millan, Rt Hon Bruce
Tilley, John


Miller, Dr M. S. (E Kilbride)
Tinn, James


Mitchell, Austin (Grimsby)
Torney, Tom


Mitchell, R, C. (Soton Itchen)
Urwin, Rt Hon Tom


Morris, Rt Hon A. (W'shawe)
Varley, Rt Hon Eric G.


Morris, Rt Hon J. (Aberavon)
Wainwright, E. (Dearne V)


Morton, George
Wainwright, R, (Colne V)


Moyle, Rt Hon Roland
Walker, Rt Hon H, (D'caster);


Mulley, Rt Hon Frederick
Watkins, David


Newens, Stanley
Weetch, Ken


Oakes, Rt Hon Gordon
Wellbeloved, James


Ogden, Eric
Welsh, Michael


O'Halloran, Michael
White, Frank R.


O'Neill, Martin
White, J. (G'gow Pollok)


Orme, Rt Hon Stanley
Whitehead, Phillip


Owen, Rt Hon Dr David
Whitlock, William


Palmer, Arthur
Wigley, Dafydd


Park, George
Wi1ley, Rt Hon Frederick


Parker, John
Williams, Rt Hon A,(S'sea W)


Pendry, Tom
Williams, Sir T. (W'ton)


Penhaligon, David
Wilson, Gordon (Dundee E)


Powel1, Raymond (Ogmore)
Wilson, Rt Hon Sir H. (H'ton)


Prescott, John
Wilson, William (C'try SE)


Race, Reg
Winnick, David


Radice, Giles
Woodall, Alec


Rees, Rt Hon M (Leeds S)
Woolmer, Kenneth


Richardson, Jo
Wrigglesworth, Ian


Robert s, Albert (Normanton)
Wright, Sheila


Robert s, Allan (Bootle)
Young, David (Bolton E)


Robert s, Gwilym (Cannock)



Robert son, George
Tellers for the Noes:


Robinson, G. (Coventry NW)
Mr. James Hamilton and Mr. Joseph Dean.


Robinson, P. (Belfast E)



Rodgers, Rt Hon William

Question accordingly agreed to.

Orders of the Day — 12. CUSTOMS AND EXCISE ADMINISTRATION

Motion made, and Question,
That provision may be made for—

(a) repealing section 94(2) of the Customs and Excise Management Act 1979;
(b) amending section 14(2) of the Alcoholic Liquor Duties Act 1979 and repealing sections 85 to 88 of that Act;


(c) increasing the minimum amount for repayments under sections 17 and 18(1) of the Hydrocarbon Oil Duties Act 1979, prescribing a minimum amount for repayments under section 19 of that Act and preventing the payment of drawback where an application can be made under that section.—[Sir Geoffrey Howe.]
put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — I3. VALUE ADDED TAX: REGISTRATION

That
(1) In paragraph 1 of Schedule 1 to the Finance Act 1972 (liability to be registered)—
18

(a) for "£4,000 there shall be substituted "£5,000"; and
(b) for "£13,500", in each place, there shall be substituted "£15,000";
and in section 20(1) of that Act (registration of local authorities) for "£13,500", in both places, there shall be substituted "£15,000".
(2) In paragraph 2 of the said Schedule 1 (termination of liability to be registered)—

(a) for "£13,500", in both places, there shall be substituted "£15,000"; and
(b) for "£12,500" there shall be substituted "£14,000".
(3) Paragraph 1 above shall come into force on 11th March 1981 and paragraph 2 above on 1st June 1981.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — I4. VALUE ADDED TAX: VALUATION

Motion made, and Question,
That provision may be made for amending Schedule 3 to the Finance Act 1972.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — I5. CAR TAX: EXTENSION TO MOTOR CYCLES

Motion made, and Question,
That—
(1) Section 52 of the Finance Act 1972 shall be amended as follows

(a) in subsection (3) the words "has three or more wheels" shall be omitted;
(b) in subsection (4)(a) for the words "vehicles capable of accommodating only one person" there shall be substituted the words "vehicles having three or more wheels and capable of accommodating only one person".
(2) The above provisions shall come into force on 1st April 1981 but car tax shall not by virtue of those provisions be chargeable on any vehicle imported on or after that date if it was exported from the United Kingdom before that date and was before being exported registered under the Vehicles (Excise) Act 1971 or any corresponding enactment in force in Northern Ireland or the Isle of Man.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No.94 (Ways and Means motions), and agreed to.

Orders of the Day — 16. CAR TAX: IMPORT AND EXPORT

Motion made, and Question,
That—
(1) For paragraph (b) of section 52(1) of the Finance Act 1972 (charge of car tax on vehicles made or registered in the United Kingdom by person not registered under Schedule 7 to that Act or under the corresponding provisions in force in the Isle of Man) there shall be substituted—

(b) made or registered in, or imported into, the United Kingdom by any other person except a person registered under Schedule 7 to the Value Added Tax and Other Taxes Act 1973 (an Act of Tynwald).
(2) In paragraph 3 of Schedule 7 to that Act (persons by whom car tax is payable) after paragraph (a) there shall be inserted the words "and
(aa) if the vehicle is imported by a person not registered under this Schedule as if it were a duty of excise chargeable on importation; and".
(3) The provisions of paragraph 3 of the said Schedule 7 as amended by paragraph (2) above shall become sub-paragraph (1) and after that sub-paragraph there shall be inserted—
(2) Subject to sub-paragraph (3) below, the Customs and Excise Management Act 1979 and, except where the contrary intention appears, any other enactments (including provisions of regulations or other instruments having statutory effect) relating generally to excise duties on imported goods, whether passed or made before or after the passing of this Act, shall have effect, with such exceptions and adaptations as the Commissioners may by regulations prescribe, as if chargeable vehicles in respect of which tax is payable in accordance with sub-paragraph (1)(aa) above were liable to a duty of excise on importation and as if the tax were that duty.
(3) The following enactments shall be excepted from those which are to have effect as mentioned in sub-paragraph (2) above

(a) sections 43(5), 1.25, 126, and 127(1)(b) of the said Act of 1979;
(b) the Customs and Excise Duties (General Reliefs) Act 1979; and
(c) sections 8 and 9 of the Isle of Man Act 1979.".
(4) Paragraph 7 of the said Schedule 7 shall be amended as follows—

(a) there shall be omitted in sub-paragraph (a) the words "and was not registered before it was exported" and in sub-paragraph (b) the words "and is not registered"— and
(b) after the words "repay it" there shall be inserted the words "subject, in the case of a vehicle registered before exportation, to such conditions as they think fit".
(5) The above provisions shall come into force on 1st April 1981.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 17. INCOME TAX (CHARGE AND RATES FOR I98I–82)

Motion made, and Question,
That—
(1) Income for the year 1981–82 shall be charged at the basic rate of 30 per cent.;
and

(a) in respect of so much of an individual's total income as exceeds the basic rate limit at such higher rates as are specified in the Table below; and
(b) in respect of so much of the investment income included in an individual's total income as exceeds the investment income threshold at the additional rate of 15 per cent.


TABLE


Higher rate bands
Higher rate


The first
40 per cent.


The second
45 per cent.


The third
50 per cent.


The fourth
55 per cent.


The fifth
60 per cent.


(2) Section 24(4) of the Finance Act 1980 (increase of basic rate limit, higher rate bands and investment income threshold) shall not apply for the year 1981–82.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 ('Ways and Means motions), and agreed to.

Orders of the Day — 18. INCOME TAX (PERSONAL RELIEFS)

Motion made, and Question,
That—
(1) Section 24(5) of the Finance Act 1980 (increase of personal reliefs) shall not apply for the year 1981–82.
(2) In section 18 of the Income and Corporation Taxes Act 1970 (relief for blind persons)—

(a) in subsection (1) (relief for one blind person) for the words following paragraph (b) there shall be substituted the words "he shall be entitled to a deduction of £360 from his total income";
(b) in subsection (2) (relief for blind couple)—

(i) paragraph (c), together with the word "and" preceding it, shall be omitted;
(ii) for the words following that paragraph there shall be substituted "he shall be entitled to a deduction of £720 from his total income".
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions):—

The House divided:Ayes 317, Noes 266.

Question accordingly agreed to.

Mr. Speaker: By leave of the House, I shall put together in one Question motions Nos. 19 to 32.

Orders of the Day — 33. CAPITAL TRANSFER TAX

Motions made, and Question,
That charges to capital transfer tax may be imposed by provisions—


(a) amending paragraph 19 of Schedule 5 to the Finance Act 1975;
(b) amending paragraph 4 of Schedule 6 to that Act;
(c) in place of Part I of Schedule 8 to that Act
(d) repealing paragraph 7(2)(b) of Schedule 10 to that Act;
(e) amending section 114 of the Finance Act 1976;
(f) relating to successive chargeable transfers
(g) relating to reversionary interests in settled property.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions):—

The House divided: Ayes 319, Noes 262.

Division No. 105]
[11.17 pm


AYES


Adley, Robert
Clark, Sir W. (Croydon S)


Aitken, Jonathan
Clarke, Kenneth(Rushcliffe)


Alexander, Richard
Clegg, Sir Walter


Alison, Michael
Cockeram, Eric


Amery, Rt Hon Julian
Colvin, Michael


Ancram, Michael
Cope, John


Arnold, Tom
Corrie, John


Aspinwall,Jack
Costain, Sir Albert


Atkins, Rt Hon H. (S'thorne)
Cranborne, Viscount


Atkins, Robert (Preston N)
Critchley, Julian


Atkinson, David (B'm'th, E)
Crouch, David


Baker, Kenneth (St, M'bone)
Dean, Paul (North Somerset)


Baker, Nicholas (N Dorset)
Dickens, Geoffrey


Banks, Robert
Dorrell, Stephen


Beaumont-Dark, Anthony
Douglas-Hamilton, LordJ.


Bendall, Vivian
Dover, Denshore


Bennett, Sir Frederic (T'bay)
du Cann, Rt Hon Edward


Benyon, Thomas (A 'don)
Dunn, Robert (Dartford)


Benyon, W. (Buckingham)
Durant, Tony


Best, Keith
Eden, Rt Hon Sir John


Bevan, David Gilroy
Edwards, Rt Hon N. (P'broke)


Biffen, Rt Hon John
Eggar, Tim


Biggs-Davison, John
Elliott, Sir William


Blackburn, John
Emery, Peter


Blaker, Peter
Eyre, Reginald


Body, Richard
Fairbairn, Nicholas


Bonsor, Sir Nicholas
Fairgrieve, Russell


Boscawen, Hon Robert
Faith, Mrs Sheila


Bottomley, Peter (W'wich W)
Farr, John


Bowden, Andrew
Fell, Anthony


Boyson, Dr Rhodes
Fenner, Mrs Peggy


Braine, Sir Bernard
Finsberg, Geoffrey


Bright, Graham
Fisher, Sir Nigel


Brittan, Leon
Fletcher, A. (Ed'nb 'gh N)


Brooke, Hon Peter
Fletcher-Cooke, Sir Charles


Brotherton, Michael
Forman, Nigel


Brown, Michael (Brigg &amp; Sc'n)
Fowler, Rt Hon Norman


Browne, John (Winchester)
Fox, Marcus


Buchanan-Smith, Alick
Fraser, Rt Hon Sir Hugh


Budgen, Nick
Fraser, Peter (South Angus)


Bulmer, Esmond
Fry, Peter


Burden, Sir Frederick
Galbraith, Hon T, G. D.


Butcher, John
Gardiner, George(Reigate)


Butler, Hon Adam
Gardner, Edward (S Fylde)


Cadbury, jocelyn
Garel-Jones, Tristan


Carlisle, John (Luton West)
Gilmour, Rt Hon Sir Ian


Carlisle, Kenneth (Lincoln)
Glyn, Dr Alan


Carlisle, Rt Hon M. (R'c'n)
Goodhart, Philip


Chalker, Mrs. Lynda
Goodhew, Victor


Channon, Rt. Hon. Paul
Goodlad, Alastair


Chapman, Sydney
Gorst, John


Clark, Hon A. (Plym'th, S'n)
Gow, Ian





Gower, Sir Raymond
Maxwell-Hyslop, Robin


Grant, Anthony (Harrow C)
Mayhew, Patrick


Gray, Hamish
Mellor, David


Grieve, Percy
Meyer, Sir Anthony


Griffiths, E. (B'ySt. Edm'ds)
Miller, Hal(B'grove)


Griffiths, Peter Portsm'thN)
Mills, Iain(Meriden)


Grist, Ian
Mills, Peter (West Devon)


Grylls, Michael
Miscampbell, Norman


Gummer, John Selwyn
Mitchell, David (Basingstoke)


Hamilton, Hon A.
Moate, Roger


Hamilton, Michael (Salisbury)
Monro, Hector


Hampson, Dr Keith
Montgomery, Fergus


Hannam, John
Mooro, John


Haselhurst, Alan
Morgan, Geraint


Hastings, Stephen
Morris, M. (N'hampton S)


Havers, Rt Hon Sir Michael
Morrison, Hon C. (Devizes)


Hawkins, Paul
Morrison, Hon P. (Chester)


Hawksley, Warren
Mudd, David


Hayhoe, Barney
Murphy, Christopher


Heath, Rt Hon Edward
Myles, David


Heddle, John
Neale, Gerrard


Henderson, Barry
Needham, Richard


Heseltine, Rt Hon Michael
Nelson, Anthony


Hicks, Robert
Neubert, Michael


Higgins, Rt Hon Terence L.
Newton, Tony


Hill, James
Normanton, Tom


Hogg, Hon Douglas (Gr'th'm)
Nott, Rt Hon John


Holland, Philip (Carlton)
Onslow, Cranley


Hooson, Tom
Oppenheim, Rt Hon Mrs S.


Howe, Rt Hon Sir Geoffrey
Page, Rt Hon Sir G. (Crosby)


Howell, Rt Hon D. (G'ldf'd)
Page, Richard (SW Herts)


Hunt, David (Wirral)
Parkinson, Cecil


Hunt, John (Ravensbourne)
Parris, Matthew


Hurd, Hon Douglas
Patten, Christopher (Bath)


Irving, Charles (Cheltenham)
Patten, John (Oxford)


Jenkin, Rt Hon Patrick
Pattie, Geoffrey


Jessel, Toby
Pawsey, James


Johnson Smith, Geoffrey
Percival, Sir Ian


Jopling, Rt Hon Michael
Peyton, Rt Hon John


Joseph, Rt Hon Sir Keith
Pink, R, Bonner


Kaberry, Sir Donald
Pollock, Alexander


Kellett-Bowman, Mrs Elaine
Porter, Barry


Kershaw, Anthony
Prentice, Rt Hon Reg


Kimball, Marcus
Price, Sir David (Eastleigh)


King, Rt Hon Tom
Prior, Rt Hon James


Kitson, Sir Timothy
Proctor, K. Harvey


Knox, David
Pym, Rt Hon Francis


Lamont, Norman
Raison, Timothy


Lang, Ian
Rathbone, Tim


Langford-Holt, Sir John
Rees, Peter (Dover and Deal)


Latham, Michael
Rees-Davies, W. R.


Lawrence, Ivan
Renton, Tim


Lawson, Rt Hon Nigel
Rhodes James, Robert


Lee, John
Rhys Williams, Sir Brandon


Lennox-Boyd, Hon Mark
Ridley, Hon Nicholas


Lewis, Kenneth (Rutland)
Ridsdale, Julian


Lloyd, Ian (Havant &amp; W'loo)
Rifkind, Malcolm


Lloyd, Peter (Fareham)
Rippon, Rt Hon Geoffrey


Loveridge, John
Robert s, M. (Cardiff NW)


Luce, Richard
Roberts, Wyn (Conway)


Lyell, Nicholas
Robinson, G. (Coventry NW)


McCrindle, Robert
Rossi, Hugh


Macfarlane, Neil
Rost, Peter


MacGregor, John
Royle, Sir Anthon y


MacKay, John (Argyll)
Sainsbury, Hon Timothy


Macmillan, Rt Hon M.
St. John-Stevas, Rt Hon N.


McNair-Wilson, M. (N'bury)
Scott, Nicholas


McNair-Wilson, P. (New F'st)
Shaw, Giles (Pudsey)


McQuarrie, Albert
Shaw, Michael(Scarborough)


Madel, David
Shelton, William (Streatham)


Major, John
Shepherd, Colin (Hereford)


Marland, Paul
Shepherd, Richard


Marlow, Tony
Shersby, Michael


Marshal I Michael (Arundel)
Silvester, Fred


Marten, Neil (Banbury)
Sims, Roger


Mates, Michael
Skeet, T. H. H.


Mather, Carol
Smith, Dudley


Maude, Rt Hon Sir Angus
Speed, Keith


Mawby, Ray
Speller, Tony


Mawhinney, Dr Brian
Spence, John






Spicer, Jim (West Dorset)
Viggers, Peter


Spicer, Michael (S Worcs)
Waddington, David


Sproat, Iain
Wakeham, John


Squire, Robin
Waldegrave, Hon William


Stainton, Keith
Walker, B. (Perth)


Stanbrook, Ivor
Walker-Smith, Rt Hon Sir D.


Stanley, John
Wall, Patrick


Steen, Anthony
Waller, Gary


Stevens, Martin
Walters, Dennis


Stewart, Ian (Hitchin)
Ward, John


Stewart, A. (E Renfrewshire)
Warren, Kenneth


Stokes, John
Watson, John


Stradling Thomas, J.
Wells, John (Maidstone)


Tapsell, Peter
Wells, Bowen


Taylor, Robert (Croydon NW)
Wheeler, John


Taylor, Teddy (S'end E)
Whitelaw, Rt Hon William


Tebbit, Norman
Whitney, Raymond


Temple-Morris, Peter
Wickenden, Keith


Thatcher, Rt Hon Mrs M.
Wiggin, Jerry


Thomas, Rt Hon Peter
Wilkinson, John


Thompson, Donald
Williams, D. (Montgomery)


Thorne, Neil (Ilford South)
Winterton, Nicholas


Thornton, Malcolm
Wolfson, Mark


Townend, John (Bridlington)
Young, Sir George (Acton)


Townsend, Cyril D, (B'heath)
Younger, Rt Hon George


Trippier, David



Trotter, Neville
Tellers for the Ayes:


van Straubenzee, W. R.
Mr. Spencer Le Marchant and Mr. Anthon y Berry.


Vaughan, Dr Gerard





NOES


Abse, Leo
Dalyell, Tam


Adams, Allen
Davidson, Arthur


Allaun, Frank
Davies, Rt Hon Denzil (L'lli)


Alton, David
Davies, Ifor (Gower)


Anderson, Donald
Davis, Clinton (Hackney C)


Archer, Rt Hon Peter
Davis, T. (B'ham, Stechf'd)


Ashley, Rt Hon Jack
Deakins, Eric


Ashton, Joe
Dempsey, James


Atkinson, N. (H'gey)
Dewar, Donald


Bagier, Gordon A, T.
Dixon, Donald


Barnett, Guy (Greenwich)
Dobson, Frank


Barnett, Rt Hon Joel (H'wd)
Dormand, Jack


Beith, A, J.
Douglas, Dick


Benn, Rt Hon A. Wedgwood
Douglas-Mann, Bruce


Bennett, Andrew (St'kp'tN)
Dubs, Alfred


Bidwell, Sydney
Duffy, A. E. P.


Booth, Rt Hon Albert
Dunlop, John


Boothroyd, Miss Betty
Dunn, James A.


Bottomley, Rt Hon A, (M'b'ro)
Dunnett, Jack


Bradley, Tom
Dunwoody, Hon Mrs G.


Bray, Dr Jeremy
Eadie, Alex


Brown, Hugh D. (Provan)
Eastham, Ken


Brown, R. C. (N'castle W)
Edwards, R. (W'hampt'n S E)


Brown, Ron (E'burgh, Leith)
Ellis, R, (NE D'bysh're)


Brown, Ronald W. (H'ckn'y S)
Ellis, Tom (Wrexham)


Callaghan, Rt Hon J.
English, Michael


Callaghan, Jim (Midd't'n&amp;P)
Ennals, Rt Hon David


Campbell, Ian
Evans, Ioan (Aberdare)


Campbell-Savours, Dale
Evans, John (Newton)


Canavan, Dennis
Field, Frank


Cant, R. B.
Fitch, Alan


Carmichael, Neil
Fitt, Gerard


Carter-Jones, Lewis
Flannery, Martin


Cartwright, John
Fletcher, Raymond (Ilkeston)


Clark, Dr David (S Shields)
Fletcher, Ted (Darlington)


Cocks, Rt Hon M. (B'stol S)
Foot, Rt Hon Michael


Cohen, Stanley
Ford, Ben


Coleman, Donald
Forrester, John


Concannon, Rt Hon J. D.
Foster, Derek


Conlan, Bernard
Foulkes, George


Cook, Robin F.
Fraser, J. (Lamb'th, N'w'd)


Cowans, Harry
Freeson, Rt Hon Reginald


Craigen, J. M.
Freud, Clement


Crawshaw, Richard
Garrett, John (Norwich S)


Crowther, J, S.
Garrett, W. E. (Wallsend)


Cryer, Bob
George, Bruce


Cunliffe, Lawrence
Gilbert, Rt Hon Dr John


Cunningham, G. (Islington S)
Ginsburg, David


Cunningham, Dr J. (W'h'n)
Golding, John





Gourlay, Harry
Newens, Stanley


Graham, Ted
Oakes, Rt Hon Gordon


Grant, George (Morpeth)
Ogden, Eric


Grant, John (Islington C)
O'Halloran, Michael


Grimond, Rt Hon J.
O'Neill, Martin


Hamilton, W. W. (C'tral Fife)
Orme, Rt Hon Stanley


Hardy, Peter
Owen, Rt Hon Dr David


Harrison, Rt Hon Walter
Palmer, Arthur


Hart, Rt Hon Dame Judith
Park, George


Hattersley, Rt Hon Roy
Parker, John


Haynes, Frank
Pendry, Tom


Healey, Rt Hon Denis
Penhaligon, David


Heffer, Eric S.
Powell, Raymond (Ogmore)


Hogg, N. (E Dunb 't'nshire)
Prescott, John


Holland, S. (L'b'th, Vauxh'll)
Race, Reg


Home Robert son, John
Radice, Giles


Homewood, William
Rees, Rt Hon M (Leeds S)


Hooley, Frank
Richardson, Jo


Horam, John
Robert s, Albert (Normanton)


Howell, Rt Hon D.
Robert s, Allan (Bootle)


Howells, Geraint
Robert s, Gwilym (Cannock)


Huckfield, Les
Robert son, George


Hudson Davies, Gwilym E.
Rodgers, Rt Hon William


Hughes, Mark (Durham)
Rooker, J. W.


Hughes, Robert (Aberdeen N)
Roper, John


Hughes, Roy (Newport)
Ross, Ernest (Dundee West)


Janner, Hon Greville
Ross, Stephen (Isle of Wight)


Jay, Rt Hon Douglas
Rowlands, Ted


John, Brynmor
Ryman, John


Johnson, James (Hull West)
Sandelson, Neville


Johnston, Russell (Inverness)
Sever, John


Jones, Barry (East Flint)
Sheerman, Barry


Jones, Dan (Burnley)
Sheldon, Rt Hon R.


Kaufman, Rt Hon Gerald
Shore, Rt Hon Peter


Kerr, Russell
Short, Mrs Renee


Kilroy-Silk, Robert
Silkin, Rt Hon J. (Deptford)


Kinnock, Neil
Silkin, Rt Hon S. C. (Dulwich)


Lambie, David
Silverman, Julius


Lamond, James
Skinner, Dennis


Leadbitter, Ted
Smith, Rt Hon J. (N Lanark)


Leighton, Ronald
Snape, Peter


Lestor, Miss Joan
Soley, Clive


Lewis, Arthur (N'ham NW)
Spearing, Nigel


Lewis, Ron (Carlisle)
Spriggs, Leslie


Litherland, Robert
Stallard, A. W.


Lofthouse, Geoffrey
Steel, Rt Hon David


Lyon, Alexander (York)
Stewart, Rt Hon D. (W Isles)


Lyons, Edward (Bradf'dW)
Stoddart, David


Mabon, Rt Hon Dr J. Dickson
Stott, Roger


McCartney, Hugh
Strang, Gavin


McDonald, Dr Oonagh
Straw, Jack


McGuire, Michael (Ince)
Summerskill, Hon Dr Shirley


McKay, Allen (Penistone)
Taylor, Mrs Ann (Bolton W)


McKelvey, William
Thomas, Dafydd(Merioneth)


MacKenzie, Rt Hon Gregor
Thomas, Jeffrey (Abertillery)


Maclennan, Robert
Thomas, Mike (Newcastle E)


McMahon, Andrew
Thomas, Dr R, (Carmarthen)


McNamara, Kevin
Thorne, Stan (Preston South)


McTaggart, Robert
Tilley, John


Magee, Bryan
Tinn, James


Marks, Kenneth
Torney, Tom


Marshall, D (G'gowS'ton)
Urwin, Rt Hon Tom


Marshall, Dr Edmund (Goole)
Varley, Rt Hon Eric G.


Marshall, Jim (Leicester S)
Wainwright, E. (Dearne V)


Martin, M (G'gowS'burn)
Wainwright, R. (Colne V)


Mason, Rt Hon Roy
Walker, Rt Hon H. (D'caster)


Maxton, John
Watkins, David


Maynard, Miss Joan
Weetch, Ken


Meacher, Michael
Wellbeloved, James


Mellish, Rt Hon Robert
Welsh, Michael


Mikardo,Ian
White, Frank R.


Millan, Rt Hon Bruce
White, J. (G'gow Pollok)


Miller, Dr M S. (E Kilbride)
Whitehead, Phillip


Mitchell, Austin (Grimsby)
Whitlock, William


Mitchell, R, C. (Soton Itchen)
Wigley, Dafydd


Morris, Rt Hon A. (W'shawe)
Willey, Rt Hon Frederick


Morris, Rt Hon J. (Aberavon)
Williams, Rt Hon A,(S'sea W)


Morton, George
Williams, Sir T. (W'ton)


Moyle, Rt Hon Roland
Wilson, Gordon (Dundee E)


Mulley, Rt Hon Frederick
Wilson, Rt Hon Sir H,(H'ton)






Wilson, William (C'try SE)
Young, David (Bolton E)


Winnick, David



Woodall, Alec
Tellers for the Noes:


Woolmer, Kenneth
Mr. James Hamilton and Mr. Joseph Dean.


Wrigglesworth, Ian



Wright, Sheila

Division No. 106]
[11.30 pm


AYES


Adley, Robert
Carlisle, Rt Hon M. (R'c'n)


Aitken, Jonathan
Chalker, Mrs. Lynda


Alexander, Richard
Channon, Rt. Hon. Paul


Alison, Michael
Chapman, Sydney


Amery, Rt Hon Julian
Clark, Hon A. (Plym'th, S'n)


Ancram, Michael
Clark, Sir W. (Croydon S)


Arnold, Tom
Clarke, Kenneth (Rushcliffe)


Aspinwall, Jack
Clegg, Sir Walter


Atkins, Rt Hon H. (S'thorne)
Cockeram, Eric


Atkins, Robert (PrestonN)
Colvin, Michael


Atkinson, David (B'm'th, E)
Cope, John


Baker, Kenneth (St, M'bone)
Corrie, John


Baker, Nicholas (N Dorset)
Costain, Sir Albert


Banks, Robert
Cranborne, Viscount


Beaumont-Dark, Anthon y
Critchley, Julian


Bendall, Vivian
Crouch, David


Bennett, Sir Frederic (T'bay)
Dean, Paul (North Somerset)


Benyon, Thomas ("A'don)
Dickens, Geoffrey


Benyon, W. (Buckingham)
Dorrell, Stephen


Best, Keith
Douglas-Hamilton, Lord J.


Bevan, David Gilroy
Dover, Denshore


Biffen, Rt Hon John
du Cann, Rt Hon Edward


Biggs-Davison, John
Dunn, Robert (Dartford)


Blackburn, John
Durant, Tony


Blaker, Peter
Eden, Rt Hon Sir John


Body, Richard
Edwards, Rt Hon N. (P'broke)


Bonsor, Sir Nicholas
Eggar, Tim


Boscawen, Hon Robert
Elliott, Sir William


Bottomley, Peter (W'wich W)
Emery, Peter


Bowden, Andrew
Eyre, Reginald


Boyson, Dr Rhodes
Fairbairn, Nicholas


Braine, Sir Bernard
Fairgrieve, Russell


Bright, Graham
Faith, Mrs Sheila


Brittan, Leon
Farr, John


Brooke, Hon Peter
Fell, Anthon y


Brotherton, Michael
Fenner, Mrs Peggy


Brown, Michael(Brigg &amp; Sc'n)>
Finsberg, Geoffrey


Browne, John (Winchester)
Fisher, Sir Nigel


Buchan, Norman
Fletcher, A. (Ed'nb'ghN)


Buchanan-Smith, Alick
Fletcher-Cooke, Sir Charles


Buck, Antony
Forman, Nigel


Budgen, Nick
Fowler, Rt Hon Norman


Bulmer, Esmond
Fox, Marcus


Burden, Sir Frederick
Fraser, Rt Hon Sir Hugh


Butcher, John
Fraser, Peter (South Angus)


Butler, Hon Adam
Fry, Peter


Cadbury, Jocelyn
Galbraith, Hon T. G. D.


Carlisle, John (Luton West)
Gardiner, George(Reigate)


Carlisle, Kenneth(Lincoln)
Gardner, Edward (S Fylde)





Garel-Jones, Tristan
Major, John


Gilmour, Rt Hon Sir Ian
Marland, Paul


Glyn, Dr Alan
Marlow, Tony


Goodhart, Philip
Marshall Michael(Arundel)


Goodlad, Alastair
Marten, Neil (Banbury)


Gorst, John
Mates, Michael


Gow, Ian
Mather, Carol


Gower, Sir Raymond
Maude, Rt Hon Sir Angus


Grant, Anthon y (HarrowC)
Mawby, Ray


Gray, Hamish
Mawhinney, Dr Brian


Grieve, Percy
Maxwell-Hyslop, Robin


Griffiths, B. (B'ySt. Edm'ds)
Mayhew, Patrick


Griffiths, PeterPortsm'thN)
Mellor, David


Grimond, Rt Hon J.
Meyer, Sir Anthony


Grist, Ian
Miller, Hal(B'grove)


Grylls, Michael
Mills, Ian(Meriden)


Gummer, John Selwyn
Mills, Peter (West Devon)


Hamilton, Hon A.
Miscampbell, Norman


Hamilton, Michael (Salisbury)
Mitchell, David (Basingstoke)


Hampson, Dr Keith
Moate, Roger


Hannam, John
Monro, Hector


Haselhurst, Alan
Montgomery, Fergus


Hastings, Stephen
Moore, John


Havers, Rt Hon Sir Michael
Morgan, Geraint


Hawkins, Paul
Morris, M. (N'hamptonS)


Hawksley, Warren
Morrison, Hon C. (Devizes)


Hayhoe, Barney
Morrison, Hon P. (Chester)


Heath, Rt Hon Edward
Mudd, David


Heddle, John
Murphy, Christopher


Henderson, Barry
Myles, David


Heseltine, Rt Hon Michael
Neale, Gerrard


Hicks, Robert
Needham, Richard


Higgins, Rt Hon Terence L.
Nelson, Anthony


Hill, James
Neubert, Michael


Hogg, Hon Douglas(Gr'th'm)
Newton, Tony


Holland, Philip(Carlton)
Normanton, Tom


Hooson, Tom
Nott, Rt Hon John


Howe, Rt Hon Sir Geoffrey
Onslow, Cranley


Howell, Rt Hon D. (G'ldf'd)
Oppenheim, Rt Hon Mrs S.


Howells, Geraint
Page, Rt Hon Sir G. (Crosby)


Hunt, David (Wirral)
Page, Richard (SW Herts)


Hunt John (Ravensbourne)
Parkinson, Cecil


Hurd, Hon Douglas
Parris, Matthew


Irving, Charles(Cheltenham)
Patten, Christopher (Bath)


Jenkin, Rt Hon Patrick
Patten, John(Oxfbrd)


Jessel, Toby
Pattie, Geoffrey


Johnson, Smith, Geoffrey
Pawsey, James


Jopling, Rt Hon Michael
Percival, Sir Ian


Joseph, Rt Hon Sir Keith
Peyton, Rt Hon John


Kaberry, Sir Donald
Pink, R, Bonner


Kellett-Bowman, Mrs Elaine
Pollock, Alexander


Kershaw, Anthony
Porter, Barry


Kimball, Marcus
Prentice, Rt Hon Reg


King, Rt Hon Tom
Price, Sir David (Eastleigh)


Kitson, Sir Timothy
Prior, Rt Hon James


Knox, David
Proctor, K. Harvey


Lamont, Norman
Pym, Rt Hon Francis


Lang, Ian
Raison, Timothy


Langford-Holt, Sir John
Rathbone, Tim


Latham, Michael
Rees, Peter (Dover and Deal)


Lawrence, Ivan
Rees-Davies, W. R.


Lawson, Rt Hon Nigel
Ronton, Tim


Lee, John
Rhodes James, Robert


Lennox-Boyd, Hon Mark
Rhys Williams, Sir Brandon


Lester Jim (Beeston)
Ridley, Hon Nicholas


Lewis, Kenneth (Rutland)
Ridsdale, Julian


Lloyd, Ian (HavantA W'loo)
Rifkind, Malcolm


Lloyd, Peter (Fareham)
Rippon, Rt Hon Geoffrey


Loveridge, John
Robert s, M. (Cardiff NW)


Luce, Richard
Roberts, Wyn (Conway)


Lyell, Nicholas
Rossi, Hugh


McCrindle, Robert
Rost, Peter


Macfarlane, Neil
Royle, Sir Anthon y


MacGregor, John
Sainsbury, Hon Timothy


MacKay, John (Argyll)
St. John-Stevas, Rt Hon N.


Macmillan, Rt Hon M.
Scott, Nicholas


McNair-Wilson, M. (N'bury)
Shaw, Giles (Pudsey)


McNair-Wilson, P. (NewF'st)
Shaw, Michael (Scarborough)


McQuarrie, Albert
Shelton, William (Streatham)


Madel, David
Shepherd, Col in (Herefbtt)






Shepherd, Richard
Trippier, David


Shersby, Michael
Trotter, Neville


Silvester, Fred
van Straubenzee, W. R.


Sims, Roger
Vaughan, Dr Gerard


Skeet, T. H. H.
Viggers, Peter


Smith, Dudley
Waddington, David


Speed, Keith
Wakeham, John


Speller, Tony
Waldegrave, Hon William


Spence, John
Walker, B. (Perth)


Spicer, Jim (West Dorset)
Walker-Smith, Rt Hon Sir D.


Spicer, Michael (S Worcs)
Wall, Patrick


Sproat, Iain
Waller, Gary


Squire, Robin
Walters, Dennis


Stainton, Keith
Ward, John


Stanbrook, Ivor
Warren, Kenneth


Stanley, John
Watson, John


Steen, Anthon y
Wells, John (Maidstone)


Stevens, Martin
Wells, Bowen


Stewart, Ian (Hitchin)
Wheeler, John


Stewart A(ERenfrewshire)
Whitelaw, Rt Hon William


Stokes, John
Whitney, Raymond


Stradling Thomas, J.
Wickenden, Keith


Tapsell, Peter
Wiggin, Jerry


Taylor, Robert (Croydon NW)
Wilkinson, John


Taylor, Teddy (S'end E)
Williams, D, (Montgomery)


Tebbit, Norman
Winterton, Nicholas


Temple-Morris, Peter
Wolfson, Mark


Thatcher, Rt Hon Mrs M.
Young, Sir George(Acton)


Thomas, Rt Hon Peter
Younger, Rt Hon George


Thompson, Donald



Thorne, Neil (IlfordSouth)
Tellers for the Ayes:


Thornton, Malcolm
Mr. Spencer Le Marchant and Mr. Anthon y Berry.


Townend, John(Bridlington)



Townsend, Cyril D, (B'heath)





NOES


Abse, Leo
Crowther, J, S.


Adams, Allen
Cryer, Bob


Allaun, Frank
Cunliffe, Lawrence


Alton, David
Cunningham, G. (IslingtonS)


Anderson, Donald
Cunningham, Dr J. (W'h'n)


Archer, Rt Hon Peter
Dalyell, Tam


Ashley, Rt Hon Jack
Davidson, Arthur


Ashton, Joe
Davies, Rt Hon Denzil (L'lli)


Atkinson, H, (H'gey)
Davies, Ifor (Gower)


Bagier, GordonA, T.
Davis, Clinton (Hackney C)


Barnett, Guy (Greenwich)
Davis, T. (B'ham, Stechf'd)


Barnett, Rt Hon Joel (H'wd)
Deakins, Eric


Beith, A, J.
Dempsey, James


Benn, Rt Hon A. Wedgwood
Dewar, Donald


Bennett, Andrew(St'kp'tn)
Dixon, Donald


Bidwell, Sydney
Dobson, Frank


Booth, Rt Hon Albert
Dormand, Jack


Boothroyd, Miss Betty
Douglas, Dick


Bottomley, Rt Hon A. (M'b'ro)
Douglas-Mann, Bruce


Bradley, Tom
Dubs, Alfred


Bray, Dr Jeremy
Duffy, A. E. P.


Brown, Hugh D. (Provan)
Dunn, James A.


Brown, R. C. (N"castle W)
Dunnett, Jack


Brown, Ron (E'burgh, Leith)
Dunwoody, Hon Mrs G.


Brown, Ronald W. (H'ckn'yS)
Eadie, Alex


Callaghan, Rt Hon J.
Eastham, Ken


Callaghan, Jim (Midd'tn&amp;P)
Edwards, R. (W'hampt'n S E)


Campbell, Ian
Ellis, R. (NED'bysh're)


Campbell-Savours, Dale
Ellis, Tom (Wrexham)


Canavan, Dennis
English, Michael


Cant, R. B.
Ennals, Rt Hon David


Carmichael, Neil
Evans, Ioan (Aberdare)


Carter-Jones, Lewis
Evans, John (Newton)


Cartwright, John
Field, Frank


Clark, Dr David (S Shields)
Fitch, Alan


Cocks, Rt Hon M. (B'stolS)
Fitt, Gerard


Cohen, Stanley
Flannery, Martin


Coleman, Donald
Fletcher, Raymond (Ilkeston)


Concannon, Rt Hon J. D.
Fletcher, Ted (Darlington)


Conlan, Bernard
Foot, Rt Hon Michael


Cook, Robin F.
Ford, Ben


Cowans, Harry
Forrester, John


Craigen, J. M.
Foster, Derek


Crawshaw, Richard
Foulkes, George





Fraser, J. (Lamb'th, N'w'd)
Mitchell, R. C. (Soton Itchen)


Freeson, Rt Hon Reginald
Morris, Rt Hon A. (W'shawe)


Freud, Clement
Morris, Rt Hon J. (Aberavon)


Garrett, John (NorwichS)
Morton, George


Garrett, W. E. (Wallsend)
Moyle, Rt Hon Roland


George, Bruce
Mulley, Rt Hon Frederick


Gilbert, Rt Hon Dr John
Newens, Stanley


Ginsburg, David
Oakes, Rt Hon Gordon


Golding, John
Ogden, Eric


Graham, Ted
O'Halloran, Michael


G rant, George (Morpeth)
O'Neill, Martin


Grant, John (IslingtonC)
Orme, Rt Hon Stanley


Hamilton, W. W. (C'tralFife)
Owen, Rt Hon Dr David


Hardy, Peter
Palmer, Arthur


Harrison, Rt Hon Walter
Park, George


Hart, Rt Hon Dame Judith
Parker, John


Hattersley, Rt Hon Roy
Pendry, Tom


Haynes, Frank
Penhaligon, David


Healey, Rt Hon Denis
Powell, Raymond (Ogmore)


Heffer, Eric S.
Prescott, John


Hogg, N. (EDunb't'nshire)
Race, Reg


Holland, S. (L'b'th, vauxh'll)
Radice, Giles


HomeRobertson, John
Rees, Rt Hon M (Leeds S)


Homewood, William
Richardson, Jo


Hooley, Frank
Robert s, Albert (Normanton)


Horam, John
Roberts, Allan(Bootle)


Howell, Rt Hon D.
Roberts, Gwilym (Cannock)


Huckfield, Les
Robert son, George


Hudson Davies, Gwilym E.
Robinson, G. (Coventry NW)


Hughes, Mark(Durham)
Robinson, P. (Belfast E)


Hughes, Robert (Aberdeen N)
Rodgers, Rt Hon William


Hughes, Roy (Newport)
Rooker, J. W.


Janner, Hon Greville
Roper, John


Jay, Rt Hon Douglas
Ross, Ernest (Dundee West)


John, Brynmor
Ross, Stephen (Isle of Wight)


Johnson, James (Hull West)
Rowlands, Ted


Johnston, Russell(Inverness)
Ryman, John


Jones, Barry (East Flint)
Sandelson, Neville


Jones, Dan (Burnley)
Sever, John


Kaufman, Rt Hon Gerald
Sheerman, Barry


Kerr, Russell
Sheldon, Rt Hon R.


Kilroy-Silk, Robert
Shore, Rt Hon Peter


Kinnock, Neil
Short, Mrs Renee


Lambie, David
Silkin, Rt Hon J. (Deptford)


Lamond, James
Silkin, Rt Hon S. C. (Dulwich)


Leadbitter, Ted
Silverman, Julius


Leighton, Ronald
Skinner, Dennis


Lestor, Miss Joan
Smith, Rt Hon J. (N Lanark)


Lewis, Arthur (N'ham NW)
Snape, Peter


Lewis, Ron (Carlisle)
Soley, Clive


Litherland, Robert
Spearing, Nigel


Lofthouse, Geoffrey
Spriggs, Leslie


Lyon, Alexander(York)
Stallard, A, W.


Lyons, Edward (Bradf'd W)
Steel, Rt Hon David


Mabon, Rt Hon Dr J. Dickson
Stewart, Rt Hon D. (W Isles)


McCartney, Hugh
Stoddart, David


McDonald, Dr Oonagh
Stott, Roger


McGuire, Michael(Ince)
Strang, Gavin


McKay, Allen (Penistone)
Straw, Jack


McKelvey, William
Summerskill, Hon Dr Shirley


MacKenzie, Rt Hon Gregor
Taylor, Mrs Ann (Bolton W)


Maclennan, Robert
Thomas, Dafydd (Merioneth)


McMahon, Andrew
Thomas, Jeffrey (Abertillery)


McNamara, Kevin
Thomas, Mike (Newcastle E)


McTaggart, Robert
Thomas, Dr R. (Carmarthen)


Magee, Bryan
Thorne, Stan (PrestonSouth)


Marks, Kenneth
Tilley, John


Marshall, D (G'gowS'ton)
Tinn, James


Marshall, Dr Edmund (Goole)
Torney, Tom


Marshall, Jim (LeicesterS)
Urwin, Rt Hon Tom


Martin, M (G'gowS'burn)
Varley, Rt Hon Eric G.


Mason, Rt Hon Roy
Wainwright, E, (Dearne V)


Maxton, John
Wainwright, R(Colne V)


Maynard, Miss Joan
Walker, Rt Hon H. (D'caster)


Meacher, Michael
Watkins, David


Mellish, Rt Hon Robert
Weetch, Ken


Mikardo, Ian
Welsh, Michael


Millan, Rt Hon Bruce
White, Frank R.


Miller, Dr M, S. (E Kilbride)
White, J, (G'gowPollok)


Mitchell, Austin (Grimsby)
Whitehead, Phillip






Whitlock, William
Woodall, Alec


Wigley, Dafydd
Woolmer, Kenneth


Willey, Rt Hon Frederick
Wrigglesworth, Ian


Williams, Rt Hon A. (S'sea W)
Wright, Sheila


Williams, Sir T. (W'ton)
Young, David (Bolton E)


Wilson, Gordon (DundeeE)



Wilson, Rt Hon Sir H. (H'ton)
Tellers for the Noes:


Wilson, William (C'trySE)
Mr. James Hamilton and Mr. Joseph Dean


Winnick, David

Question accordingly agreed to.

Mr. Speaker: By leave of the House, I shall put together the Question on motions Nos. 34 to 40.

Orders of the Day — 19. RELIEF FOR INTEREST (LIMIT FOR I98I–82)

Motion made, and Question,
That the limit imposed by paragraph 5 of Schedule 1 to the Finance Act 1974 shall, subject to any reduction to be made under that paragraph, be £25,000 for the year 1981–82.—[Sir
Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 20. CORPORATION TAX (CHARGE AND RATE FOR FINANCIAL YEAR I980)

Motion made, and Question,
That corporation tax shall be charged for the financial year 1980 at the rate of 52 per cent.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 2I. ADVANCE CORPORATION TAXX (RATE FOR FINANCIAL YEAR I98I)

Motion made, and Question,
That the rate of advance corporation tax for the financial year 1981 shall be three-sevenths.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 22. CORPORATION TAX (SMALL COMPANIES)

Motion made, and Question,
That—

(a) the small companies rate for the financial year 1980 shall be 40 per. cent.; and
(b) the fraction by reference to which corporation tax charged on income is reduced under section 95(2) of the Finance Act 1972 shall for that financial year be two-twenty-fifths—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 23. BENEFITS IN KIND (CARS)

Motion made, and Question,
That in paragraph 5(1)(b) of Part II of Schedule 7 to the Finance Act 1976 (increase of cash equivalent where use of car for business travel does not amount to more than 1000 miles) for "1000" there shall be substituted "2500".—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 24. STOCK RELIEF

Motion made, and Question,
That the relief provided by Schedule 5 to the Finance Act 1976 may be replaced by new provisions applying to periods of account ending on or after 14th November 1980.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 25. PAYMENTS FOR LOSS OF EMPLOYMENT ETC.

Motion made, and Question,

That provision may be made withdrawing the relief provided by paragraphs 3 to 5 of Schedule 8 to the Income and Corporation Taxes Act 1970 and altering the relief provided by paragraph 7 of that Schedule.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways
and Means motions), and agreed to.

Orders of the Day — 26. CAPITAL ALLOWANCES

Motion made, and Question,
That provision may be made—

(a) for amending, in relation to sales and other events occurring after 17th December 1980, the provisions relating to writing-down allowances, balancing allowances and balancing charges in respect of industrial buildings and structures, commercial buildings in enterprise zones and qualifying hotels;
(b) for extending references to sales in those provisions and in the other provisions of Chapter I of Part I of the Capital Allowances Act 1968 so as to include transfers otherwise than by way of sale; and
(c) for extending the cases to which section 78 of that Act applies.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 27. SETTLEMENTS

Motion made, and Question,
That charges to income tax may be imposed by provisions amending or supplementing sections 451 and 454 of the Income and Corporation Taxes Act 1970.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways
and Means motions), and agreed to.

Orders of the Day — 28. PREVENTION OF TAX AVOIDANCE

Motion made, and Question,
That charges to income tax may be imposed by provisions amending or supplementing sections 478 and 480 of the Income and Corporation Taxes Act 1970.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 29. INSURANCE COMPANIES

Motion made, and Question,
That provision may be made with respect to the division of income, gains and losses between different classes of business in the case of insurance companies with income, gains or losses arising from certain government securities.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 30. WRITE-OFF OF GOVERNMENT INVESTMENT: RESTRICTION OF TAX LOSSES

Motion made, and Question,
That provision may be made for restricting the relief available for losses and other amounts in the case of any body where an amount of government investment in that body is written-off.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 31. RELIEF FOR LOSSES ON UNQUOTED SHARES IN TRADING COMPANIES

Motion made, and Question,
That amendments may be made in the definitions of "group"., "holding company" and "investment company" in section 37(12) of the Finance Act 1980.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 32. CAPITAL GAINS

Motion made, and Question,
That charges to capital gains tax, corporation tax may be imposed by provisions—


(a) replacing section 19(3) of the capital Gains Tax Act 1979;
(b) amending section 79 of that Act;
(c) relating to property held on trust;
(d) relating to cases in which relief is given under section 79 of the Finance Act 1980.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 34. STAMP DUTY: SALES OF HOUSES AT DISCOUNT BY LOCAL AUTHORITIES ETC.

Motion made, and Question,
That the following provisions shall have effect for the period beginning 23rd March 1981 and ending thirty-one days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
(1) Where a conveyance or transfer to which this paragraph applies is subject contingently to the payment of any money (whether by virtue of that conveyance or transfer or otherwise), then notwithstanding section 57 of the Stamp Act 1891, that money shall not be deemed to be part of the consideration in respect of which the conveyance or transfer is chargeable with ad valorem duty.
(2) For the purposes of section 74(5) of the Finance (1909–10) Act 1910 the consideration for any conveyance or transfer to which this paragraph applies shall be deemed to be valuable consideration.
(3) Paragraphs (1) and (2) above apply to any conveyance or transfer on sale of a dwelling-house (including the grant of a lease) at a discount by—

(a) any Minister of the Crown or Northern Ireland department;
(b) a local authority within the meaning of Part V of the Housing Act 1957, a county council, a district council within the meaning of the Local Government Act (Northern Ireland) 1972 or in Scotland a regional, district or islands council, the common good of such a council or any trust under its control;
(c) the Housing Corporation;
(d) the Scottish Special Housing Association;
(e) the Northern Ireland Housing Executive;
(f) a housing association registered under section 13 of the Housing Act 1974 or Article 124 of the Housing (Northern Ireland) Order 1981;
(g) a development corporation established by an order made or having effect as if made under the New Towns Act 1965 or the New Towns (Scotland) Act 1968 or an urban development corporation established by an order made under section 135 of the Local Government Planning and Land Act 1980;
(h) the Commission for the New Towns or a new town commission established under section 7 of the New Towns Act (Northern Ireland) 1965;
(i) the Development Board for Rural Wales;
(j) the Council of the Isles of Scilly;
(k) a police authority within the meaning of section 62(b) of the Police Act 1964 or section 2(1) or 19(9)(b) of the Police (Scotland) Act 1967, or the Police Authority for Northern Ireland;
(l) an Education and Libraries Board established under the Education and Libraries (Northern Ireland) Order 1972;
(m) any person mentioned in paragraph (e), (i), (j) or (1) of section 1(10) of the Tenants' Rights, Etc. (Scotland) Act 1980.
(4) The foregoing provisions shall apply to instruments executed on or after 23rd March 1981.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 35. STAMP DUTY: SHARED OWNERSHIP TRANSACTIONS

Motion made, and Question,
That the following provisions shall have effect for the period beginning 23 March 1981 and ending thirty-one days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
(1) Section 97 of the Finance Act 1980 (shared ownership transactions) shall have effect with the amendments specified in paragraphs (2) and (3) below.
(2) In subsection (1) after the word "value" there shall be inserted the words "or sum".
(3) In subsection (2)—
(a) for paragraph (b) there shall be substituted—
(b) is granted partly in consideration of a premium calculated by reference to—

(i) the market value of the dwelling, or
(ii) a sum calculated by reference to that value, and partly in consideration of rent"; and
(b) in paragraph (d) for the words "paragraph (b) above" there shall be substituted the words "paragraph (b)(i) above or, as the case may be, the sum referred to in paragraph (b)(ii) above" and at the end there shall be added the words "or as the case may be, to that sum".
(4) Where a lease is granted by a body mentioned in subsection (3) of the said section 97 which—

(a) is of a dwelling for the exclusive use of the lesso:, or, if there are joint lessees, of those lessees;
(b) provides that the lessee may on payment of a sum require the terms of the lease to be altered so that the rent payable under it is reduced;
(c) is granted partly in consideration of rent and partly in consideration of a premium calculated by reference to—

(i) the premium obtainable on the open market for the grant of a lease containing the same terms as the lease but with the substitution for the rent payable under the lease of the minimum rent, or
(ii) a sum calculated by reference to that premium; and
(d) contains a statement of the premium referred to in paragraph (c)(i) above, or as the case may be the sum referred to in paragraph (c)(ii) above, and the minimum rent and a statement to the effect that the parties intend duty to be charged in accordance with this section by reference to that premium, or as the case may be that sum, and that rent,
paragraph (5) below shall apply; and in this paragraph "minimum rent" in relation to any lease means the lowest rent which could become payable under the lease if it were altered as mentioned in paragraph (b) above at the date of the grant.
(5) Where this paragraph applies the lease shall be chargeable to stamp duty as if the premium paid by the lessee were equal to the premium, or as the case may be the sum, stated in the lease in accordance with paragraph (4)(d) above and the rent payable were as so stated.
(6) The foregoing provisions shall apply to instruments executed on or after 23rd March 1981.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 36. DEVELOPMENT LAND TAX

Motion made, and Question,
That in connection with provisions for deferring liability to development land tax charges may be imposed under section 27 of the Development Land Tax Act 1976.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 37. PETROLEUM REVENUE TAX

Motion made, and Question,
That provision may be made—

(a) for denying supplement under section 2(9) of the Oil Taxation Act 1975 to—

(i) expenditure claimed for a claim period ending after 31st December 1980 and incurred after the end of


the chargeable period in which a net profit first accrues to a participator from an oil field; and
(ii) expenditure under certain contracts entered into after 1st July 1980 which provide for deferred payments;
(b) for limiting relief under section 9 of that Act to a number of chargeable periods determined by reference to the chargeable period mentioned in paragraph (a)(i) above; and
(c) for taking into account for the purposes of petroleum revenue tax certain payments made to participators by the Secretary of State or the Department of Commerce for Northern Ireland by reference to licences granted under the Petroleum (Production) Act 1934 or the Petroleum (Production) Act (Northern Ireland) 1964.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 38. SUPPLEMENTARY PETROLEUM DUTY.

Motion made, and Question,
That a tax shall be charged on the gross profits (calculated as Parliament may determine) which accrue from oil fields determined for the purposes of Part I of the Oil Taxation Act 1975 to persons who are, or are treated for the purposes of that Part of that Act as, participators in the fields.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 39. SPECIAL TAX ON BANKING DEPOSITS.

Motion made, and Question,
That a tax shall be charged on persons carrying on banking businesses on 10 March 1981 by reference to certain deposits held by them in the last quarter of 1980.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — 40. RELIEF FROM TAX (INCIDENTAL AND CONSEQUENTIAL CHARGES)

Motion made, and Question,
That is is expedient to authorise any incidental or consequential charges to any duty or tax (including charges having retrospective effect) which may arise from provisions designed in general to afford relief from tax.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — PROCEDURE RESOLUTIONS

Mr. Speaker: By leave of the House, I shall put together the two procedure resolutions.

Orders of the Day — PROCEDURE (EXCHANGE CONTROL)

Motion made, and Question,
That, notwithstanding anything to the contrary in the practice of the House relating to matters which may be included in Finance Bills, any Finance Bill of the present Session may—

(a) make provision for the purpose of controlling the acquisition of sterling by persons resident outside the scheduled territories as defined in the Exchange Control Act 1947 and the borrowing of foreign currency by persons resident in the United Kingdom; and

(b) amend the references to authorised dealers in foreign currency or gold in section 2 of the Banking and Financial Dealings Act 1971.—[Sir Geoffrey Howe.]

put forwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — PROCEDURE (FUTURE TAXATION)

Motion made, and Question,
That, notwithstanding anything to the contrary in the practice of the House relating to matters which may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year—

(a) provisions for charging income tax under Schedule E on payments of unemployment benefit and supplementary allowance;
(b) provisions relating to sick pay;
(c) Provisions relating to the taxation of benefits received by employees who by reason of their employment are provided with cars, petrol, credit tokens, transport vouchers or medical insurance;
(d) provisions relating to relief for interest;
(e) provisions relating to the deduction of tax from payments made to companies in respect of services provided by workers supplied by those companies;
(f) provisions relating to the abolition of excise licences for dealing wholesale in certain alcoholic liquors.—[Sir Geoffrey Howe.]

put pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Orders of the Day — FINANCE [MONEY]

Queen's Recommendation having been signified—

Motion made, and Question,
That, for the purposes of any Act of the present Session relating to finance, it is expedient to authorize—
(1) the payment out of the Consolidated Fund of any sums payable on or after 1 April 1982 under section 47(2) of the Irish Land Act 1903 or section 26(2) of the Government of Ireland Act 1920;
(2) the payment out of National Loans Fund (with recourse to the Consolidated Fund) of any sums payable after that date under section 16(7) of the National Loans Act 1968 in respect of securities issued under the Northern Ireland Land Act 1925;
(3) payments out of and onto the National Loans Fund in consequence of provisions relating to exchange control.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means motions), and agreed to.

Bill ordered to be brought in upon the foregoing Resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Secretary Sir Keith Joseph, Mr. Secretary Jenkin, Mr. Secretary Howell, Mr. Secretary Fowler, Mr. Leon Brittan, Mr. Peter Rees and Mr. Nigel Lawson.

Orders of the Day — FINANCE

Bill to grant certain duties, to alter other duties and to amend the law relating to the National Debt and the Public Revenue and to make future provision in connection with Finance, presented accordingly by Mr. Nigel Lawson and read the First time; to be read a Second time tomorrow and to be printed. [Bill 93.]

Orders of the Day — Town and Country Planning

Mr. Ted Graham: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Town and Country Planning (National Parks, Areas of Outstanding Natural Beauty and Conservation Areas) Special Development Order 1981 (S.I., 1981, No. 246), dated 19 February 1981, a copy of which was laid before this House on 27 February, be annulled.

Mr. Speaker: It will be for the convenience of the House if at the same time we discuss the second prayer:
That an humble Address be presented to Her Majesty, praying that the Town and Country Planning General Development (Amendment) Order 1981 (S.I., 1981, No. 245), dated 19 February 1981, a copy of which was laid before this House on 27 February, be annulled.

Mr. Graham: We are tonight to give approval—or not—to a series of what are laughingly called "minor amendments" to development control within our planning laws. I have no hesitation in saying, however, that the impact of these proposals could affect many ordinary householders more directly than the Budget proposals that the House has just passed.
I begin by acknowledging that the Opposition support the general movement in the past 10 years towards simplifying the controls over both residential and commercial development. Mr. George Dobry made a series of detailed proposals intended to speed up and simplify our legislation, and we support those, but in our desire to remove the frustrations felt by builders, architects, commerce and industry as well as by the householder and the planning committee we must beware that we do not tip the balance detrimentally away from the best interests of the community simply because this offers the prospect of speed of decision or economy.
We are dealing here with potential mistakes which, if made, can damn the planning system for ever. More important, a wrong approval can not only cause domestic and neighbourly strife; it may then stand, literally, as a monument to bureaucratic stupidity. Today's planning errors may become tomorrow's costly reminder that quick decisions are not always the cheapest, nor is the cheapest necessarily the best.
Before examining the package of changes contained in the orders, we should remind ourselves of what the Secretary of State asserts that they will achieve. In answer to a question on 11 November 1980 he said:
We anticipate that the changes will achieve a worthwhile reduction in the load on the planning machine in England and Wales, enabling local authorities to reduce expenditure and concentrate on processing the more important applications more quickly and efficiently."—[Official Report, 11 November 1980; Vol. 992, c. 178.]
Secondly, they are intended
to remove the necessity for local planning authorities to process large numbers of planning applications for minor development of little significance in the protection of public amenity.
In the consultative document the Secretary of State referred to
small householder developments, the vast majority of them being completely uncontroversial.
There we have it: the purpose of the proposals is to reduce
the load on the planning machine
and to "reduce expenditure", and they are "of little significance." Those three matters are the nub of the Government's case.
We must not forget—and no doubt the Minister will remind us—that these amendments to the General

Development Order form but one part of a small piece of Government or departmental strategy to simplify, to speed, to make more efficient use of the planning system and to economise. Indeed, the Under-Secretary of State reminded the House of these interlocking initiatives when we considered the planning fees aspect a short while ago. The 6 March issue of the journal Planning, however, states:
From April 1st local authorities will find it more difficult to determine planning applications within eight weeks. That is the conclusion from a straw poll of planning authorities on the implications of the introduction of planning charges and new amendments to the general development order.
Let us consider what the orders seek to achieve by allowing an extension, for instance, of industrial buildings—increasing permitted development without approval from 10 per cent. to 20 per cent., subject to a maximum increase in floor area to 750 square metres instead of 500 square metres at present.
While the Opposition appreciate the value to the community of encouraging small businesses, in giving this amendment a fair wind we are concerned with some of the implications. Many a small industrial firm will be sated either within or adjacent to residential property. We shall therefore wish to ensure that in encouraging small businesses we do not do so at the expense of residential amenity. For instance, where will the extra 20 per cent. extension to be allowed in this come from? A likely source might well be land at present used for car parking or landscaping—both crucial uses if the factory is situated cheek by jowl with residential property. What steps has the Minister in mind to ensure that residential amenity is not sacrificed in order to expand the industrial use?
I now turn to the proposals to allow a change of use from light industry or general industry to warehousing or storage, or vice versa, in premises below 235 square metres. The Government argue in favour of the change that it will stimulate and expand the small firm sector and encourage private sector investment in small industrial premises. However, in many areas the market rent for small warehousing units is higher than it is for light industrial units, and if the relaxation results in existing light industrial units being lost through conversion to warehousing, it would be the opposite of what the Minister desires. In any event, warehousing can often result in generating a greater traffic flow than light industrial. There is a case, in our view, for converting warehousing to light industrial, but there is none the other way round.
The proposal that garages, stables, loose boxes and coach houses would not count as an enlargement of the dwelling house if they are sited 5 metres or more from the house but would be treated as buildings incidental to the enjoyment of the dwelling house could also have a damaging effect upon neighbouring properties. The proposed amendment would encourage an owner to site his garage so that he could retain the full permitted development tolerance for an extension to his house. In the absence of a rear access road, this would be achieved only by siting the garage a third of the way down his back garden. He would then be able to build the garage in whatever materials he chose. In permitted development there is no control over the form, materials and detailing of the building work. The visual impact of the uncontrolled development will increase in quantity, to the detriment of our visual amenity.
I welcome the exemptions from these orders as they apply to national parks, areas of outstanding beauty and conservation areas. It is right for the Secretary of State to be concerned to restrict a damaging effect on amenity in these cases. But what about the rest? I can do no better than to quote from a letter that I received from the Chelmsford borough council, in which it is stated:
It is interesting to note that the Government accepts that the proposed relaxations of control could have a 'significantly damaging effect on amenity' in, for example, conservation areas. It follows that a proposal which the Government concede may well damage amenity in a conservation area could also have a similar effect in other areas.
Are we not in grave danger of aggravating and accentuating two classes of area in this country? That which is already enjoying a measure of protection is to be even more protected. Those areas outside the protected areas will, when the order comes into effect, be at the mercy of the jerrybuilder, the enthusiastic do-it-yourself merchant, and the neighbour who could not care less.

Mr. Michael Latham: The hon. Gentleman knows perfectly well that the order simply extends the exemptions which already exist. His arguments are arguments of principle against having any exemptions at all.

Mr. Graham: Perhaps the hon. Gentleman will wait until I have finished the whole of my speech. He will see that I deal with the case for the exemptions. By virtue of the exemption in the conservation areas and the areas of special beauty, we shall have two classes of conservation area. We shall have those which were in existence before 1 April and those which come into existence after 1 April. In the case of those which were in existence before 1 April, the present limits of 10 per cent. or 50 cubic metres for extensions will continue to be applied. However, in the case of declarations after 1 April—regardless of when—properties within the new conservation areas will be permitted to develop up to 15 per cent., or 70 cubic metres, without planning permission. The local authority will be faced with the choice of tolerating the ridiculous situation of two conservation areas with wholly disproportionate standards or of applying to the Secretary of State for action on a special development order. Will that happen in every case?
On 1 April, my local authority of Enfield will have 11 conservation areas. Most of them are of great charm and historical value. I refer, for example, to Enfield town, Church Street, Edmonton, Winchmore Hill Green, Forty Hill, Bulls Cross, and Ponders End. Different areas are in different situations. In future further conservation areas may be sought immediately adjacent to existing ones. Will it not look daft if some are restricted to 10 per cent. while others are entitled to a 15 per cent. development limit?
Has the Secretary of State decided whether he will entertain local authority requests to include future conservation areas within the exclusions? Will he entertain requests to apply 10 per cent. and not 15 per cent. to specific conservation areas within an authority? Must the provision apply to them all? If the answer is that it can apply to one area, does that not create different classes of resident within an area? Does it not also raise the question of hybridity? Will the Minister comment on that possibility? Indeed, existing legislation envisages such a possibility.
I turn to the proposal that gives the Opposition the greatest unease, namely the proposal to allow—as

permitted development—the enlargement of a house to increase from the present limit of 10 per cent., or 50 cubic metres, to 15 per cent., or 70 cubic metres. That is an increase of no less than 50 per cent. It would be churlish not to acknowledge the significant alteration that has been made by exempting terraced houses from the order. That could prove most helpful. However, one chief planning officer spoke to me after the modification had been made. He said "It will not reduce work, merely change it. In fact, it will change from consideration of the environmental aspects into a bureaucratic interpretation of rules about whether the property is a terrace, in a conservation area, an area of outstanding beauty and so on."
Who wants this change? Local authorities do not want it. Local planning committees and planning officers do not want it; authorities both large and small are virtually unanimous about that. Like this Government, the Labour Government had a proposal foisted on them. The Labour Government consulted just as widely as this Government. They took account of the representations and withdrew the proposal. Consultation was a more meaningful concept under the Labour Government than it is now.
Most of the representations that I have received have been against the proposals. I invite the Minister to tell us what evidence he has received of bodies and of individuals in favour of the measure. The representations that I have received from local authorities and others state that the present system is clear, fair and expeditious. There have been no complaints about the system. It is fair to neighbour and applicant alike. Time and again I am told that increasing permitted development for residential property will lead to a proliferation of complaints about larger extensions. That would negate any savings in staff time that might be gained from a reduced number of applications. Time will be spent on telling neighbours what is or is not permitted.
Will the Secretary of State listen to the voices of householders? I listen to residents' associations and to the Federation of Enfield Residents' Associations, which represents 30,000 ratepayers in the London borough of Enfield. They have unanimously asked me to oppose the increase from 10 to 15 per cent. My ratepayers' association—the Bush Hill Park ratepayers' association—wrote to the Secretary of State. It told the right hon. Gentleman that any relaxation would open the door to undesirable and ill-planned development which would be detrimental to neighbouring properties. My own council, the London borough of Enfield, has been vigorous in opposing this development, and earlier attempts in 1977 were just as strongly resisted.
The impact which a house extension may have is determined not only by its size but also by its position and characteristics. It is not unknown that even comparatively minor extensions, which may now be carried out without planning permission, may seriously affect the architectural quality of an entire street or reduce the quality of life for next-door neighbours.
Let us consider the exemptions in schedule 1 for dormer windows. That is ludicrous. Some of the worst environmental visual slums result from dormer window extensions to the side or rear of houses, using the roof space. They are hideous eyesores if allowed to be treated unsympathetically. They cry out for control, yet the order excludes them from the permitted development tolerances.
Let me quote directly from three authorities which no doubt have made their views known to the Members serving their areas. First, Blaby council wrote:
Although a number of individuals will be less constrained by planning controls, even a greater number will be provoked by their absence.
Although the number of applications would be reduced, additional time would be taken determining which proposals constituted permitted development and dealing with the enquiries and complaints which would be generated.
I quote the views of the London borough of Barnet:
Proposal (a) in the consultation document is considered unacceptable in the Metropolitan area where density of development is already relatively high and would inevitably result in extensions which would be visually unsatisfactory and adversely affect the amenities of adjoining property. Furthermore, even though such a relaxation would result in a reduction in the number of applications for planning permission, there would be unlikely to be a reduction in the vetting procedures to define permitted development, and certainly no reduction in correspondence arising from developments actually undertaken.
I now quote from a letter from the South Oxfordshire district council, a council which I am sure is well known to the Secretary of State. The chief planning officer, a Mr. Phillips, writes:
It is my personal opinion that a reasonable professional process will merely be replaced by a legalistic bureaucratic one …Changing the GDO will increase the work involved in volume and make the calculations more complex. No doubt the Ombudsman will confirm that disputes between neighbours very quickly become disputes between the aggrieved neighbour and the local planning authority, and explaining the legal aspects of permitted development is time consuming when the people concerned are obviously affected in an adverse way by the exercise of such permitted development rights.
Mr. Phillips goes on to say:
I have given Mr. Heseltine, who is the Member of Parliament for a large part of this district, information to the effect that his proposals could reduce our applications by 5 per cent. in number but that overall our workload could well increase, and I gave the reasons outlined above. I feel very strongly that it is totally wrong for the Government to introduce legislative change to achieve bogus objectives.
The same gentleman wrote to me after the modifications had been notified, saying:
I have repeatedly told the Secretary of State and the DoE, that dealing with an application is often quicker than arguing about whether it's permitted development, and a good deal more rewarding for the professional staff.
These orders are a hotch-potch. However much the Secretary of State tries to justify them as needed or essential, however much he uses jargon or gimmicks, he will not do so in response to the demands of the people or the profession. He will seek to justify them on the grounds that they will add to his armoury of weapons in his fight against bureaucracy and waste. His zeal is misplaced, but, worse, he demeans and diminishes the work of a dedicated profession and democratically elected local councillors. He will gravely damage our environment; he will set neighbour against neighbour; he will bring our whole system of planning control into disrepute—all vainly to seek a reduction in public expenditure. In that he will fail, and we shall all be the poorer.

Mr. Sydney Chapman: Not for the first time, I have the pleasure of following the hon. Member for Edmonton (Mr. Graham). Not for the first time, I must disagree with his interpretation of statutory instruments relating to town and country planning. I thank

the hon. Gentleman for the considerable tribute that, he paid to my profession of town and country planning. This gives me an opportunity of declaring whatever interest there may be in belonging to that profession.
These orders are necessarily complicated and technical, though I welcome them very much. After all, they come originally from orders introduced about two or three years ago by a Labour Secretary of State for the Enviromnent. Those orders were withdrawn after considerable criticisms were made, basically from two areas: from the environmentalists, to put it in shorthand, led by the redoubtable Lord Duncan-Sandys, and by local authority associations which were concerned about what they thought would be the intensity of development not requiring planning permission in certain areas of the country.

Mr. Latham: My hon. Friend ought also to add the Liberal Party, whose representatives are singularly missing.

Mr. Chapman: I am grateful to my hon. Friend. He has an expert knowledge of town and country planning matters. I did not know that they extended to comments on political parties.
Where I disagree with the hon. Member for Edmonton is that I believe that the Secretary of State or the Minister has carefully considered the very genuine criticisms that were made about the original order. The whole purpose of this order is to meet those criticisms. So, as the hon. Member says, there have been excluded from this order increased exemption for minor developments not requiring planning permission, areas of outstanding natural beauty, national parks and the 5,000-plus in conservation areas.
In dealing with objections about intensity of development, the Minister has introduced the special exemption for terraced housing, to which the hon. Gentleman referred, and, very importantly, exemption where the extension of the development would take over 50 per cent.—I am again speaking in shorthand—of the curtilage of the premises. I believe that those exemptions meet the serious criticisms and worries that were raised by town and country planners, environmentalists and local authority associations.
I think that I can emphasise the point made by my hon. Friend the Member for Melton (Mr. Latham) to the hon. Member for Edmonton. If no exemptions existed stow, I think that the hon. Member for Edmonton would have a point in talking about the extra work in which local planning authorities would be involved in vetting whether applications had been received or not received and whether they needed planning permission. These applications, in any case, would have to come in under building regulations. However, as exemptions already exist, there can be no extra work involved for local planning authorities. I, for one, disagree with my borough, Barnet, if it has made that criticism.
When the great Town and Country Planning Act was introduced in 1948.——

Mr. Latham: 1947.

Mr. Chapman: The Act came into force on 1 January 1948, but the Bill was passed in 1947. I do not believe that there was any intention then that town and country planning should be involved with modest extensions to


either residences or industrial premises. The machine has become far too bureaucratic, and this change is a step in the right direction.
I welcome the orders and hope that the House passes them. I hope that my hon. Friend the Minister will say how many fewer applications will be made as a result of the orders. When the right hon. Member for Stepney and Poplar (Mr. Shore) introduced his draft orders three years ago, he talked about a reduction of 20 per cent. in the number of applications. I always thought that that was slightly exaggerated. I believe that these orders will save about 10 per cent. or possibly 15 per cent. If that is so the 10 or 15 per cent. is at the bottom end—the minor applications—although they might cause local controversy, this will clear the system so that planning officers can deal as thoroughly but more expeditiously with the more significant applications.
Statistics provided by the local planning authority associations show that, although Parliament has laid down a two-month period for determining planning applications, many take much longer. That is particularly true of the more significant applications. Time is money. Time is wasted when applications take much more than eight weeks to determine. In an age of inflation and of unemployment in the construction industry, I hope that the planning professions will co-operate to see whether they can improve on their performance.
A planning application is either right or wrong. It does not take more than eight weeks to determine whether it is right or wrong. I do not suggest that the system should be quickly bypassed or that bad decisions should be taken. I hope that the orders are passed and that as a result the more significant applications are equally thoroughly but more expeditiously determined.

Mr. Nicholas Baker: I wish to make a brief contribution which does not relate to the speech by my hon. Friend the Member for Chipping Barnet (Mr. Chapman), who is an expert in these matters. It relates indirectly more to the point made by the hon. Member for Edmonton (Mr. Graham) about Ponders End. I welcome the orders in general. However, S.I. No 246 seems to engrain into planning legislation
an area of outstanding natural beauty".
I should be ruled out of order if I outlined what that animal is. It has little planning status. We seem to be taking a step towards developing this powerless institution.
Of course, I believe that beauty, whether in the countryside or the town, must be protected. It is clear that national parks and conservation areas, which the hon. Member seeks to attach to Ponders End, have meaning in countryside and town. But an area of outstanding natural beauty is a vague concept. It is a vague creation of British bureaucracy at its best. We try to arrive at the right decisions by empowering a whole range of bodies to take decisions about an area of countryside. If one wants to see the nonsense that that sometimes produces, one has only to look at the Blackmore Vale, which is not in an area of outstanding natural beauty, and the Winterbourne Valley, which is. There is no possible reason for such a designation. One argues that Cranborne Chase should be designated because it will be treated differently if it is not.
My argument is that we should regard the whole of the countryside differently. If the planning rules that apply in

the order relate to beautiful areas, whether in the town or the countryside, they should apply to countryside across the board.
Area of outstanding natural beauty
does not constitute a sufficient definition of such an area. We should protect all countryside, whether beautiful or not. I hope that careful consideration will be given to this particular planning designation of an area of outstanding natural beauty to see whether it is the right and relevant way to designate those parts of our countryside that need protection.

Mr. Roger Moate: I wish to make a brief intervention. It is perhaps inevitable, after the matters that we have debated earlier today—the Budget and all the difficult decisions that we have had to make in that regard—that the House wishes to reach a speedy conclusion and to pay less attention to these orders than they deserve. But the amendments to the General Development Order are significant, and it is regrettable that a debate of this importance is overshadowed by what went before.
I have sympathy with much of what was said by the hon. Member for Edmonton (Mr. Graham). I suspect that he will not carry the matter to a vote, but he has expressed the anxieties of many people who are deeply concerned about this relaxation of planning controls.
We are in a dilemma. We want a relaxation of planning controls, and at the same time we want to protect the rights of individuals to protest against developments of neighbouring properties that are intrusive upon their own properties, upon their own rights. I know of many cases in my constituency where there have been objections to developments alongside—garages and extensions—that have caused major loss of amenity to individuals.
No matter how many modifications are introduced in these orders as compared with those introduced by the Labour Government, there will still be many people who feel that they have suffered an injustice and lost some rights to protest against extensions of a neighbouring property that would deprive them of light, amenities and so on. It worries me that we are debating the matter in this way.
I do not pretend that I know the answer. As I said, we are in a dilemma. We want to relax bureaucracy and increase individual freedom, and yet we shant to protect individuals. I do not wish to be too pompous, but Edmund Burke said that if we could not have reform without injustice we should not have reform. Yet we are engaging in a reform that will create injustices for some individuals, and that worries me.
The point was put effectively by my hon. Friend the Member for Dorset, North (Mr. Baker) that we are exempting numerous conservation areas from many of these relaxations, as well as areas of outstanding natural beauty. We are saying that in those areas individuals will not be free to carry out extensions but that in other areas they can do so. We are drawing a black and white line and making a clear definition between areas. But the world is not like that. There are many grey areas where people are entitled to similar protections.
Clearly, I—and, I suspect, the House—will not vote against the orders, and while I understand my right hon. Friend's motives in seeking to relax and remove many petty restrictions I still believe that in years to come many


individual Members of Parliament will receive complaints that will arise as a direct result of these relaxations. Some of us may perhaps regret the way in which they will have been passed this evening.

Mr. Tony Durant: I rise on a small matter and I shall be grateful if the Minister will consider it. It relates to
Class III—Changes of use
which raises the whole subject of the change of use of premises. I draw my hon. Friend's attention to early-day motion No. 220 on planning regulations for sex shops. This issue is causing great anxiety in many urban areas, although it is not strictly related to the statutory instrument. In my constituency there was difficulty when a sex shop was opened next door to the local Baptist church. That was not the most popular of decisions in my constituency.
There are anxieties on this issue. As the law stands, there is no town and country planning regulation to deal with the matter, no way of stopping such developments. The Department should see whether there is some way of empowering the local authority at least to regulate these occasional undesirable developments in unfortunate circumstances such as that in my constituency.

Mr. Roger Sims: In suburban parts of London such as my constituency there is a somewhat ambivalent attitude towards the changes incorporated in the orders. We all like the idea that our homes are our castles and that we are free to do what we like in them, even to the point of extending them, but we are not too keen on the chap next door doing the same. That sums up the attitude in my constituency. It applies particularly where there are not only a substantial amount of residential development but, here and there, small pockets of industrial development.
Inevitably, residents complain periodically about noise, dust and dirt from adjacent industrial facilities. Will my hon. Friend the Under-Secretary explain why it is proposed that the permitted extension of a dwelling-house shall be up to 15 per cent. while for industrial developments it is 20 per cent.? It seems somewhat illogical to my constituents who live near these pockets of industrial development that industrial property can be expanded to a greater extent than can private residential property.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): I shall commence by trying to answer some of the points raised by my hon. Friends and then turn to those made by the hon. Member for Edmonton (Mr. Graham).
My hon. Friend the Member for Chipping Barnett (Mr. Chapman) gave the entire justification for what we are doing. I greatly welcomed the way in which he commented upon it. He asked specific questions about the changes. We estimate that there are about 50,000 planning applications a year dealing with domestic extensions of this kind. Since there is a total of 500,000 planning applications of all kinds, that number represents 10 per cent. We expect the changes we are proposing, with the

changes in the relationship between district and county authorities on planning and with the finishing of the structure plan operation, to result in a reduction in public spending of about £10 million.
My hon. Friend the Member for Dorset, North (Mr. Baker) sought to raise the interesting point about areas of outstanding natural beauty. I take note of his comments and have sympathy concerning the problems he described. However, they are not directly related to the orders. I shall write to my hon. Friend.
My hon. Friend the Member for Faversham (Mr. Moate) asked about intrusions on neighbours' rights, and my hon. Friend the Member for Chislehurst (Mr. Sims) made a similar point. We accept that in a number of developments there would and could be an increase in friction between neighbours, but that happens under the present operations with a permitted 10 per cent. increase in size. The safeguards that we have built into the system, especially in relation to terraced properties and two-storey extensions and the boundaries of properties, should go a long way towards reducing the cause of friction.
My hon. Friend the Member for Reading, North (Mr. Durant) asked whether the orders would make any difference to the problem of sex shops. They will not do so. It is only fair to recognise that that matter is causing widespread anxiety. Although the matter does not fall within planning law at the moment, my right hon. Friend the Secretary of State is viewing these developments with some concern and will, no doubt, consider further what, if anything, can be done.

Mr. Moate: The order specifically refers to tripe shops and cats' meat shops. How many tripe shops and cars' meat shops are there compared with sex shops?

Mr. Shaw: My hon. Friend is right. The order also refers to shops for the sale of pet animals and birds. However, I must not be drawn too far away from the massive importance of the matters under discussion.
We cannot have it two ways. Either we believe that there is a desire for a real relaxation of planning controls, with a legitimate right to relax controls where possible, or we do not. As the hon. Member for Edmonton recognised, the Labour Government closely considered the matter in 1976 and 1977. In 1976, the right hon. Member for Deptford (Mr. Silkin) was reported in a press release as follows:
Mr. Silkin told a conference of builders and town planners in London that the planning system was a good one but he believed that too much time was being spent on dealing with trivial matters when matters of principle should be considered. He was, therefore, proposing a number of possible changes to the General Development Order … The proposals. … were designed to give a greater freedom without destroying the planning framework".
That is what we are about at this time.
In another place in 1977., Baroness Birk said that the previous Administration's proposals would leave more time for the careful and efficient control of the proposals that were of greater significance to the community and would reduce the frustration felt by people wishing to extend their own houses who had previously found themselves caught up in the planning system. She also said that the proposals would be of benefit to small firms proposing to extend their premises. I wholeheartedly agree with her.
We believe that it is important, where possible, to reduce the level of bureaucracy and the level of public


expenditure and to free from control a large portion of those whose planning applications are approved in full measure. About 93 per cent. of planning applications of this sort already receive approval. We are not dealing with a vast range of planning applications that cause local authorities grave disagreement when considering them.

Mr. Graham: I am worried about a phrase that the Minister used earlier when he suggested that £10 million was about the sum that the Government sought to save. They are starting with the premise of seeking to save £10 million. In order to save that, we have to agree to these relaxations. There was nothing wrong with a previous Government or a previous Minister having an aspiration but, having consulted those who had to carry it out, reaching the conclusion either that the time was not right or that the extent of relaxation was too much. Will the Minister say what weight of opinion he has received contrary to that which I have received from the profession and from councillors not in favour of the relaxations listed in the orders?

Mr. Shaw: The hon. Gentleman must recognise that there is a major difference between our two parties about what to put at the top of the list. We tend to put the ultimate customer at the top of our list—the person who has to decide whether he wishes to extend his property. We have to decide whether the application needs to be considered and whether the planning application procedure should apply to him. We have a different view from that of the Opposition about public expenditure. We have a different view also about the principle of what planning should do. Planning should deal in the round with the environment in which individuals may be free as far as possible to pursue their own legitimate aspirations. These are major differences that I do not think we can reconcile in this short debate.
More than half a million planning applications are made every year, and the planning system is under strain. About half of the applications relate solely to small household developments. Many of the applications are approved. About 93 per cent. of all householder planning applications in England during 1979–80 were granted. It is clear that not all the applications are necessary. It is equally clear that at present the more trivial of the applications are serving only to clog the planning machine and are imposing an unjustifiable burden on local authority resources. This is happening at the expense of taxpayers and ratepayers.
From the house or factory owner's point of view, the retention of unnecessary controls is an infuriating and time-wasting obstruction. It will become even more indefensible when the new system of charging fees for planning applications comes into operation on 1 April. There will then be all the more reason for trying to ensure that applications have to be made only when there is some genuine planning requirement to be met.

Mr. Nigel Spearing: Apart from one man's petty bureaucracy being another man's protection, is not the hon. Gentleman's logic at fault when he argues that 93 per cent. of all household planning applications made in 1979–80 were granted? Is it not clear that at present applications are made with some care and with some concern for neighbours? That is why they are accepted. If there is a relaxation of the controls, it does not

follow that the same degree of care will be taken. The chance of an authority rejecting an application will not be present to the same degree.

Mr. Shaw: The hon. Gentleman is entitled to his view. We believe that the changes that we propose and the safeguards that we have built into the orders will deal with the applications that cause difficulty. There are constraints implied in the orders that we are putting before the House.
It will be appropriate for me to make some firm observations on the main provisions of these measures. First, the amount by which a householder may enlarge his house without needing to make a planning application is increased from the present limit of 50 cubic metres, or 10 per cent. of its cubic size if greater, to 70 cubic metres or 15 per cent.
Secondly, private garages will in future be treated as extensions of the dwelling-house for the purposes of the order only if they are built within five metres of the house. Otherwise, they will be treated in the same way as other outbuildings, such as garden sheds, and will not, therefore, count towards the permitted allowance for house extensions.
Thirdly, the limit for permitted extensions to industrial buildings is raised from 10 per cent. to 20 per cent. This is subject to a maximum increase in floor area of 750 square metres instead of 500 square metres as at present.
All these measures were proposed in the previous Administration's 1977 amendment order. However, in that measure a blanket relaxation was proposed which took no account of the special needs of certain areas. We are very conscious, however, that an extension which was quite unexceptionable in itself could, in certain very sensitive areas, have an impact out of all proportion to its size. We have, therefore, taken the view that it would not be justified to relax controls in national parks, areas of outstanding natural beauty and conservation areas. The purpose of the special development order currently before the House is to exclude all such existing areas from these relaxations.

Mr. Graham: The Minister has mentioned industrial relaxation. Where will the additional space come from? Clearly, space for an industrial site will be precious. I am worried about small factories that are sited within residential areas. This is an aspect to which the hon. Member for Chislehurst (Mr. Sims) referred. Such a factory may have a tiny car park. When the owners are seeking the opportunity to expand, they may decide that the 20 per cent. provision makes it worth while, whereas it would not have been worth while with the 10 per cent. provision. Certain landscaping conditions could have applied. What steps has the Department in mind to ensure that existing protections for local residents will not be diminished to encourage industrial users?

Mr. Shaw: We are giving industry no new rights. We are merely extending an existing right. It cannot be argued that a new problem is being created. It is our experience that there are relatively few instances in which industrial extensions give rise to the problems that the hon. Gentleman has in mind. Although the occasional difficult case will still occur, the various safeguards will, in general, prove adequate to guard against any widespread or serious problem.
In addition, there is a new safeguard withdrawing permission for any extension within 5 metres of the site boundary. In some cases, that will represent a tightening rather than a relaxation of control.
The other main item in the order is a new flexibility of use for small industrial and warehousing premises. That has the twin aims of giving small firms an extra element of freedom, and, as a result of that freedom, of encouraging developers to provide new premises for small firms.
All those proposals were the subject of consultation last year. We had many replies, including several from right hon. and hon. Members, giving a great deal of helpful and constructive comment. We considered the views expressed very carefully and took them fully into account in reaching our decisions. As a result, we made a number of substantial modifications in order to minimise the risk of unsuitable or unneighbourly development. That point was raised by a number of my hon. Friends.
The main modifications that we have made will exempt terraced houses from the relaxation, limit the amount of garden that can be built on, control attempts to incorporate garages into overlarge extensions and control two-storey extensions close to a neighbour's boundary. Industrial extensions will also be brought under control when they are close to the boundary

Mr. Latham: Will my hon. Friend confirm a point regarding warehouses which is of concern to some of us? If a use is changed from a factory into a warehouse of up to the permitted 235 square metres, any extension in the size of the warehouse beyond that will require planning permission. The local authority could refuse that planning permission if it so wished, for otherwise the warehouse could grow and grow.

Mr. Shaw: That would be the position. However, as my hon. Friend will recognise, the establishment of the warehouse for its original purpose would constitute the most relevant fact in determining any further application that might be sought to be made for an increase in size.

Sir Brandon Rhys Williams: I am interested in mansion blocks. It has been the practice to add a complete extra floor to mansion blocks on the ground that that was within the percentage of permitted additional development. There is a risk that that manoeuvre might be made easier under these orders.

Mr. Shaw: I cannot answer my hon. Friend's question about mansion blocks and extensions now, but I shall write to him.
We cannot foretell the precise effect of those changes, but we estimate that they will take out of the planning system some 50,000 applications a year, or perhaps more. That represents a significant gain in freedom to the individual citizen, a reduction in unnecessary bureaucracy and a saving in public expenditure. That is why I invite the House to support these measures.

Mr. Graham: Will the Minister reply to the point I made about the different categories of conservation areas that will result—those which existed before 1 April and those which will exist after 1 April? Is it not correct to say that those in existence before 1 April will be restricted to permitted development of 10 per cent. and that those in

existence after 1 April will be able to have 15 per cent.? Will the Minister comment on the difference in category and the aggravations which that can cause?

Mr. Shaw: My charity knows no ends. Where there is a conservation area or an area of outstanding natural beauty in the process of being created, there would be a problem about 1 April, which is the date when the regulations will come into force. My right hon. Friend has powers to deal with that matter. Should there be the subsequent establishment of an area of conservation or outstanding natural beauty, that would be taken into account in dealing with the matter.
The hon. Member suggested that two areas of planning would be involved—two conservation areas where double standards might apply. It is a question not of creating two nations or employing double standards but of moulding the framework to meet the special needs of a particular area. That is the hallmark of good planning.

Question put and negatived.

Motion made, and Question put,
That an humble Address be presented to her Majesty, praying that the Town and Country Planning General Development (Amendment) Order 1981 (S.I., 1981, No. 245), dated 19 February 1981, a copy of which was laid before this House on 27 February, be annulled—[Mr. Graham.]

The House divided: Ayes 42, Noes 100.

Question accordingly negatived.

Orders of the Day — STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 73A(5) (Standing Committee on Statutory Instruments, &amp;c.),

Orders of the Day — CIVIL AVIATION

That the draft Carriage by Air Acts (Application of Provisions) (Third Amendment) Order 1981, which was laid before this House on 25 February, be approved.—[Mr. Goodlad.]

Question agreed to.

Orders of the Day — Performing Right Society

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]

Mr. Les Huckfield: I congratulate you, Mr. Deputy Speaker, on assuming your office.
I am grateful for the opportunity of raising on the Adjournment the need for investigation by the Department of Trade of the activities and operation of the Performing Right Society. In so far as I have an interest to declare, it is that I am the political secretary of the National Union of Labour and Socialist Clubs, an organisation of some 130 Labour clubs which makes to me continuing complaints about the activities and operation of the PRS.
Many Labour club secretaries would prefer not to pay a PRS levy or tariff at all. However, I do not wish tonight to raise the issue of principle. I wish to concentrate on the method of operation of the PRS, which is the chief complaint that the PRS attracts from Labour clubs and their committees and secretaries.
I have no objection to secrets where vital national defence or commercial confidentiality is involved, but the PRS is different. Secrecy seems to operate there mainly for the benefit of senior management. The Department of

Trade has powers of investigation. London and County Securities, Pinnock Finance, the recent example of Norton Warburg Ltd. and the case of Lloyd's and Sasse, where financial journalists have complained of a lack of secrecy, are rather similar examples of where the Department has the powers and, many feel, ought to use them.
We are dealing with a monopoly, formed in 1914, which Parliament has allowed to become a de facto, almost statutory, monopoly. If one is in the music business and wishes to receive royalty payments, it must be done through the PRS. If one uses music, one must make a payment to the PRS. Although the PRS is a de facto monopoly which Parliament has allowed to be created, the difficulty is that neither those who have to pay nor those who receive the money can find out what happens to it in between.
We are talking not about a small business but about an organisation with a membership of 12,000, with an annual turnover of £40 million and involving £9 million of overseas royalties. It is a multinational business, transferring millions of pounds around the globe, without its members knowing what takes place. It has a massive headquarters in Berners Street, employing some 500 staff, and an overhead administration cost of some £5 million.
Worse than that, it employs a small army of snoopers who prey on Labour and other clubs. They suddenly appear at the door demanding large sums of money in almost Dick Turpin fashion. It is high handed and it is arbitrary. When challenged, it very often cannot produce sufficient evidence. Labour clubs which I represent and other organisations would like to know what goes on and I venture to suggest that many of the members of the PRS would like to know what goes on as well. Many club secretaries find themselves being asked to do ridiculous amounts of secretarial work on behalf of the society and the burden is greatly resented.
It is just as bad for the members of the Performing Right Society. They find it very difficult to carry out a detailed check on the sources of their payments. When they ask for additional information, they are sometimes told that supplying it could cost up to 80 per cent. of the sum to which they might ultimately be entitled. A member might be entitled, for example, to receive royalties of £10,000, but by the time the cost of investigation and administration had been borne this might mean that that person would receive only about £1,250. That is just one example. It has now reached the stage where many members are afraid even to ask for information in case their revenue from the PRS suffers the following year.
Until five years ago, only 12 per cent. of the membership had a vote at all. Worse than that, only the governing council of the Performing Right Society had the lists of those entitled to vote. Little wonder was it, then, that every one who stood for election to the governing council of the PRS in the past 60 years was elected. It is a self-perpetuating oligarchy. Indeed, I venture to suggest that compared with the Performing Right Society a papal conclave looks like a Longbridge mass meeting.
When a PRS member complained that this was undemocratic and suggested that the disfranchisement of 88 per cent. of the membership might be illegal, Michael Freegard, the general manager, who I believe now titles himself the chief executive, said in a suit that he was being accused of
acting improperly, dishonestly and secretively in the discharge of his responsibilities".


Those are his words and they reflect a very serious accusation not just against him but against the conduct of the society as well. Quite remarkably, however, although that is a very serious accusation and those are his words, he withdrew the suit without apology and was even ordered to pay the detractor's costs. For his pains in doing that, he was awarded a 50 per cent. increase in his salary which is now some £30,000 per year.
Little wonder was it that someone quipped to me over the telephone this afternoon that if anyone was wondering what had happened to "The Godfather Part III", perhaps this is it. Those are not my words. They are the sentiments of someone who deplores the activities of the Performing Right Society, as do many others. Indeed, as a result of that, some 25 hon. Members signed a letter to The Guardiandeploring the secrecy in the organisation. But, I repeat, this is an organisation to which the Labour clubs and others that I represent have to pay royalties. It is a monopoly that Parliament has allowed to develop.
Following a further initative and a further resort to legal action, the appellate court found that the principal excuse that that governing council was using—that it did not have the authority to publish the names and the voting lists—was both false and untrue. The appellate court in fact said that at all times the governing council had an absolute right to make the voting lists available. Little wonder was it that at the 1978 annual general meeting there was a 77 per cent. majority for the publication of the lists. The difficulty was that, having taken the legal action which ultimately brought that about, a portion of the costs was assessed against the PRS member who brought the suit.
In 1977, the voting lists were extended to include 54 per cent. of the membership—hardly a great advance in democracy, although I suppose one must consider that to be the case with the PRS. The difficulty is that the members now have either one, 10 or 20 votes. Therefore, about 12,000 members have 21,000 votes. But the problem is that 400 members have 20 votes each, giving them 8,000 votes—enough to exert control over the society. There are proxy votes as well, which means that publishers have an undue influence, and still only the council members themselves know who has 20 votes.
That means that, despite the legal actions which have taken place, despite the minuscule extensions in democracy which have been brought about, the control still rests in hands of very few people—very big music publishers but very few people—and we are talking about certain key companies in the music business.
I also refer to the unknown size and the unknown contents of the alleged "black box", for within the Performing Right Society there exists a sum of money known as a black box. No one knows the sums, no one knows where it comes from, and no one knows where it might be destined to go. It is administered, it seems to be collected and it seems to accrue on entirely internal and unaccountable rules.
Why is there the need to preserve all this security and secrecy in an organisation which Parliament has allowed to become a monopoly, to which the clubs that I represent have to pay royalties if they want to perform music, and to which members of the music profession have to apply if they wish to receive royalty payments?
Why, for example, has the Performing Right Society expended as much as £100,000 and over £200,000 of members' money in fighting off these reforms? Why are there these great endeavours to preserve all this secrecy? Could it be, for example, that someone inquiring into the activities of the PRS might get round to finding out about some of the interest-free loans which members of the staff have received? I accept that these have now been made interest-bearing loans. But when only 19 per cent. of the loans have been made to about 500 employees—these are figures gleaned from the annual reports—and when 81 per cent. of the loans have been made to seven members of the executive staff, with 50 per cent. of the loans to the ultimate benefit of the general manager and the legal adviser, including, I understand, a £56,000 loan for a house mortgage, is this perhaps the reason for the great endeavour on the part of the PRS to preserve security and secrecy?
It cannot be that the society wants to preserve secrecy against its competitors; it is not that kind of organisation. It cannot be that the society wants to preserve secrecy because it fears that it will lose the market. It does not have any other market competitor; it has the market to itself. One has to pay the tariff to it and one can only receive one's royalties through it. A great many people who either have to pay to or receive money from the PRS wonder about these questions daily, weekly and annually—even to the extent of taking their concern to court. So why is there this great urgency and need to preserve secrecy?
The Minister may say that the amendments being proposed to the Companies (No. 2) Bill in another place will be sufficient, but the amendment to section 110 of the Companies Act—indeed, it has come to be called "the PRS amendment"—certainly will not be sufficient for the organisation that I represent, for, although it will enable the publication of voting lists and names and further details, that will only enable us to see who has the vote at present. It certainly will not enable us to inquire into matters which may have transpired in the past. So I am afraid that I shall find it difficult to accept it if the Minister simply says that the Government intend to amend the Companies (No. 2) Bill.
I do not seek a full-blown inquiry under sections 164 and 165 of the 1948 Act. The Minister has all the powers that he needs in section 109 of the Companies Act 1967. He will know that that is often variously referred to in the trade as the "suspicion clause" or the "suspicion section". When the Secretary of State has certain information relayed to him, he can ask for documents to be produced.
I should like to quote from the tribunal report in the 1971 case of Vehicle and General Insurance. It held that the Minister concerned was negligent on the ground that it was his
responsibility at all times after the 1967 Act came into force to ensure that suspicions which attached to the Company were resolved one way or another. His position in the Department … and his authority to use the extensive powers in the 1967 Act, gave him the necessary weapons to fulfil his responsibility".
I suggest that those sentiments apply in this case.
Even at this late hour, I submit that the Secretary of State has the necessary powers. I hope that he will initiate an inquiry according to the powers at his disposal in the 1967 Act. I do not want to minimise the concern. This issue involves not only Labour clubs but all sorts of organisations that use music in one way or another. There is a great deal of concern on their part and an equal amount


of concern on the part of members of the Performing Right Society. This issue will not go away. I hope that the Government will show their concern in the appropriate manner tonight.

The Under-Secretary of State for Trade (Mr. Reginald Eyre): In the time available, I shall reply by explaining how the system works. I expect in part to answer the criticisms of the hon. Member for Nuneaton (Mr. Huckfield) and to show how the working of the system has been and will be improved by the enactment of the Companies Bill.
The right to authorise the public performance and broadcasting of his works is one of the most valuable given by copyright law to a composer of music. No one can reasonably deny that composers are entitled to fair payment when their musical works are enjoyed by the public. But public performances take place at all times and in diverse locations and it is impossible for a composer as an individual to police his right. Equally impossible is the public's task of obtaining the necessary permission from the author of each piece of music they want to perform. The Performing Right Society Ltd. provides the solution to both these problems.
Since the Performing Right Society was established more than 60 years ago—bringing together British composers and music publishers and collectively exercising their right to authorise public performance—it has enjoyed world-wide recognition for efficiency and has earned a sound reputation. Not only does it enable composers to obtain an important part of their earnings but it gives music users convenient access to virtually the whole musical repertoire by means of a single simple licence.
A licence scheme has been drawn up for each different class of establishment where music is performed in public, ranging from the BBC—which is a very large music user—to village halls where music may be played only occasionally. Generally, the terms of the licence will be negotiated with the body representing the particular class of music user. In the event of a dispute over terms, reference can be made to the independent Performing Right Tribunal, which has power to revise tariffs which it considers unreasonable.
The Performing Right Society, exercising as it does a very large number of composers' rights, is in a quasi-monopoly position. Having regard to the purposes that I have described, it could not be otherwise. In order to avoid abuse of this power, the Performing Right Tribunal was set up by Parliament by virtue of part IV of the Copyright Act 1956. Anyone who is refused a licence by the Performing Right Society or who is not satisfied with the appropriate tariff may make reference to the tribunal. Its fee is kept deliberately low in order not to deter the little man who thinks that his case should be independently reviewed. In considering cases referred to it, the tribunal has to fix the terms at the level it considers reasonable in all the circumstances. The chairman of the tribunal is appointed by the Lord Chancellor.
The hon. Gentleman referred to clubs. Most working mens' clubs, by which I mean the usual kind of social or members' clubs, are found in large numbers in urban and rural parts of the country. Their membership includes people from all occupations and walks of life. Therefore, I shall subsequently refer to them as social clubs. Most of

these clubs will provide music for the enjoyment of their members. They may provide live musical entertainment, background music or performances by means of radio or television sets. The Performing Right Society's licensing scheme provides for all these possibilities and takes into account the number of persons present and the value of the music to the activity.
For example, music for dancing commands a higher fee than background music or music incidental to the use of a television set. Most club management committees recognise that music is a commodity to be paid for like any other. The annual licence fees charged by the society represent a relatively modest sum when related to an hour's entertainment per member present.
The hon. Gentleman referred particularly to Labour clubs, although he went on to explain the background of his complaint. The Performing Right Society has a tariff for the performance of music in clubs, details of which are published each year and full details of which can be seen in the 1980 yearbook. The publication of those details contradicts one of the hon. Gentleman's allegations of secrecy.
The tariff offers concessionary rates to various club associations, and that has been taken up by the Club and Institute Union, the Association of Conservative Clubs, the National Union of Liberal Clubs, the Royal British Legion, and others. But the National Union of Labour and Socialist Clubs has declined. I am not sure whether that has been recent under the hon. Gentleman's influence or whether it occurred in earlier years, although I would have thought that in earlier years it would fit in with this pattern. Disputes over tariffs can be referred to the Performing Right Tribunal, but there has been no reference in this instance.
The exercise of copyright is a private matter between the copyright owners—in this case the Performing Right Society—and those who want to put on public performances of music. There is no provision for Government intervention. If it is dissatisfied, the National Union of Labour and Socialist Clubs may bring the matter before the Performing Right Tribunal, which is empowered to fix tariffs at a reasonable level. There is no question of political bias of any kind with regard to any of these arrangements.
The PRS licence schemes include provision for calculating the charge. In the case of clubs, performances are broken down into live performances, recorded music, and background music. It is up to the music user to make sure that his use of music is correctly assessed by the PRS in accordance with the published tariff.
I want to refer to the hon. Gentleman's allegations of secrecy, because there appears to me to be no secrecy about the public operation of the society. It publishes full information, including a statement of accounts, in its yearbook, which is readily available. That can be seen. It is spelt out in the accounts. It shows the revenue and how it is made up, as well as United Kingdom revenue and that which comes from overseas. It deals with the administrative costs, the total for distribution and the manner in which it is distributed.
Having rejected another of the hon. Gentleman's allegations about unjustified secrecy, I turn to the subject of the companies limited by guarantee and to the disclosure of voting rights of members. I acknowledge that the provisions of clause 54 of the Companies (No. 2) Bill, as introduced in another place, would not for technical


reasons require companies limited by guarantee, such as the Performing Right Society, to disclose the voting rights of their members. The hon. Gentleman is right in that respect. However, a good deal of work has been done on this subject in recent months, and this deficiency is to be corrected. The Government plan to have amendments tabled to achieve this correction by the time the Bill comes to this House.
Therefore, I suggest that the hon. Gentleman should study carefully these amended provisions as I believe that they will meet the substance of his points with regard to disclosure of voting rights. In that respect, I think that the hon. Gentleman had grounds for complaining. The provisions to be introduced will require disclosure of voting rights. I believe that that will deal substantially with the main point that the hon. Gentleman raised in this respect.
The hon. Gentleman also referred to loans or quasi-loans to officers. I emphasise that the Companies Act 1980 dealt with this matter. There is now an obligation to disclose any such transactions of this kind.
I should like to refer quickly to the Whitford committee, which reported in 1977 having considered the collective exercise of a composer's performing right and acknowledged that the society had monopolistic control. The committee considered, however, that it was clearly an advantage to promoters of musical entertainments to be able to obtain from one source a licence to perform all the music they needed. The committee reported that there was little criticism, on the evidence that it received, of either the powers or the operation of the tribunal.
Many views and comments have been received since the committee reported, and they are under consideration. A Green Paper setting out the Government's views is expected to be published within the next few months, and that will relate to the whole of copyright.

Mr. Les Huckfield: The Minister is trying to be very helpful. However, is he saying that, in view of the

evidence which I have submitted this evening, and in view of other evidence which I could send to him, he does not think that there are any grounds for any kind of investigation under section 109 of the Companies Act 1967? I grant that he is putting before the House powers which the Government are preparing to take, but that still does not cover the great majority of the points that I have made tonight.

Mr. Eyre: I thought that the hon. Gentleman gave an over-critical account of the general public function of the society. I have tried to explain the general background and the benefit, not only to music producers but also to the general public, which comes out of that system. I have also gone further, though, with regard to the internal affairs of the society. I have tried to explain, first, the ways in which the hon. Gentleman's allegations of secrecy about the accounts and so on are not justified and how the information is available, but, secondly, I have tried to explain the way in which, with the changes under company law—the Bill which is now before Parliament—there will be a change and an improvement in the publication of voting rights. I believe that that is an important matter within guarantee societies of this category. The changes will relate to all the guarantee societies.

Mr. Huckfield: If I send the Minister information, will he at least examine it to see whether an investigation under section 109 of the 1967 Act is warranted?

Mr. Eyre: For the reasons that I have explained. at this stage I do not think that the hon. Gentleman has fully justified his request for an investigation. Considerable expense is involved in such investigations. However, if the hon. Gentleman would like to send me extra information, I shall consider it, but I ask him to pause and to review the matters that I have put before the House tonight, because I believe that he will find that the substance of his main criticisms will be met.

Question put and agreed to.

Adjourned accordingly at nineteen minutes past One o' clock.